Stimulating growth

How low salaries slow down the Russian economy: explains Ivan Lyubimov

Kirill Tremasov, director of the Loko-Invest analytical department, recently said that an increase in economic growth in Russia over the past five years was an increase in GDP by only 0.9% instead of 2.5%, as expected earlier. This news did not reach the level of sensation, but became the reason for rather gloomy discussions about the real state of affairs with the growth of the Russian economy.

However, it is not entirely clear what the expert community was so alarmed: there is almost no difference whether GDP has grown by 2.5% or 0.9% in 5 years.

The difference and reason for discussion would be if it suddenly turned out that GDP over 5 years did not grow by 20%, but by 10%. And 1% in 5 years or 2.5% for the same period - it is, obviously, the lack of growth, stagnation.

What difference does one or two drops of water fell on you for the whole day? Apparently, the rain that you were waiting for today did not happen today, and the calculation of the number of drops that may have fallen on you because someone hung on the balcony of just washed underwear does not make much sense.

The Russian economy has been stagnating for a long time: a serious growth in the past decade, which was largely based on the well -being of raw materials markets, has already become part of history. However, in stumbling growth, which is observed in Russia for a long time, there is nothing new and unusual with a historical or spatial point of view. From a statistical point of view, this is rather the norm.

Another thing is that this is not an example of how the economy should function and develop. But the overwhelming number of catching up the worlds of the world is slowly growing and developing slowly. So in the historical perspective, the countries of Latin America, Africa, a number of Eastern European states, etc. are growing. It happens that they accelerate and grow quickly for 5, 10 or 12 years in a row, and then a long stagnation or even a decline begins.

On average, such growth is quite slow. Such a manner of economic growth resembles the movement of an electric train, which often stops and, sometimes, for a long time stands on the spare track.

And in order to catch up with developed rich countries, you need growth, more reminiscent of the movement of a high -speed train - fast and almost without stops.

The ingredients of the economic miracle

Slow economic growth in Russia, as well as in those countries that grow according to similar samples, is often associated with a weak industry structural transformation and slow growth in performance. The industry structural transformation consists in the emergence of more complex export industries capable of selling electronics, cars, aviation equipment, transport and financial services, etc. in foreign markets. And high performance allows you to sell both these benefits and those traditionally produced by economies, not only to the closest geographical neighbors - often not the richest and most developed economies - but to the whole world, as Germany or China does.

Why are the processes of structural transformation and performance growth in Russia slowly? To begin with, we will again pay attention to the fact that not many states have achieved success in them over the past 60 years. This is Taiwan, South Korea, Singapore, Israel, some countries of southern Europe, China, to some extent Malaysia and some other economies.

So, the lack of great success in these processes is a common phenomenon.

In Russia, there are not enough key specialists - engineers, chemists, designers, etc. for successful structural transformation and performance growth.

However, even when these experts manage to prepare, the results of their work largely depend on management solutions, and with the quality of the latter in Russia there are at least not less problems than with the availability of specialized specialists. Managers in Russia often like to show severity to subordinates, but rarely know how to manage well.

The problems of the Russian economy are not only in human capital, but also in insufficient export focused and often conflicting state policy, poorly protected property rights, in the not better state of labor ethics, low availability of financial resources for many companies and much more. In addition, the Russian economy is quite limited by sanctions, which, albeit not so much, but still slow down its growth.

Trade unions for acceleration

Another important problem is the inequality of income, the cause of which is largely associated with a deficiency of industry structural transformation in the economy. When simple industries dominate the country, competition among workers remains at a very high level. To become a competitor leading in Russia in Russia - a seller, a driver or a security guard is quite simple. Competition is great in many other professions, for example, banking clerks or school teachers.

The structure of the economy and its employment structure gives more negotiation power to employers who establish low salaries and adverse working conditions. Another structure of the labor market would correspond to a more complex structure of the economy, in which various engineering professions, architects, designers, programmers, qualified doctors, etc. would play a more noticeable role. With this structure of the labor market, employers would have faced a limited selection of workers, which would largely weaken the negotiation power of the employers and force those to pay a higher salary and, in general, it is better to treat their subordinates.

However, it is worth noting that the structural transformation alone cannot solve all problems with inequality: the labor market will still consist in many ways of segments of simple professions, where the employer will have a large selection among workers. And in this case, the problem of income inequality can solve the trade union movement, which more recently it was customary to talk about as a harmful institute that reduces incentives for work and distorting the labor market.

Many future economists at the university desk told that trade unions set a higher salary than equilibrium, thereby reducing employers' incentives for hiring and increasing unemployment. But this is true in the case of a competitive labor market.

In Russia, and not only in it, many segments of the labor market are monopoly (monopsonic) from the employer of the labor force, i.e. employer.

In this case, the salary is set below the equilibrium level, and the introduction of a higher salary with the efforts of trade unions can to some extent reconstruct a competitive balance, i.e. Making a situation for workers is better.

Without technological and institutional changes, however, the negotiating force mainly belongs to the employer who sets the salary and conditions at the workplace, weakening the motivation for work, which force the employee to constantly think about dismissal and, possibly, leaving the low -performance shadow sector. The latter forms the process of negative industry structural transformation, when individuals move to less modern ones from more modern, but difficult for an employee of jobs.

All these problems need to be solved, and this can be done subject to the correct choice of priority reforms, their careful, but consistent embodiment. However, it is worth assuming that it may take a lot of time to obtain noticeable results: it is most likely to be about decades.