Emilia Slabunova on the adoption of the law on raising the retirement age

Emilia Slabunova’s blog post, 28.09.2018

The State Duma has passed a law on raising the retirement age in the third (and final) reading. Neither the President, nor the ruling party are willing to talk about the consequences. Let us discuss what will happen and what will not happen as a result of this step of the Russian government.

What is guaranteed to us is an increase in poverty, a decline in the living standards, growth of inequality between the poor and the rich, broadening of the informal sector of the economy (also because the decision has been taken to introduce criminal liability for employers who do not hire or fire people of a pre-retirement age), further shrinking of the domestic market, increase of injuries in the workplace due to the growth of the group of mature age workers and growth of disability, and hence the increase in spending to support this category of citizens.

The birth of children will clearly be postponed by young families to a later period, and we can predict with certainty an increase in population decline. It is obvious that emigration of young and active citizens to the countries with higher living standards, wages and life expectancy will increase. The outflow of the rural population to cities will accelerate and an even greater number of different areas of the country will become desolate.

Payments on social obligations of the state in connection with the growth of unemployment and disability of the population will increase, conflicts and aggressiveness in society will rise, and consequently, the repressive reaction of the state will grow.

What will not happen? Certainly, labour productivity and wages will not grow, most likely life expectancy will not increase due to the deterioration of the health of the older working generation, growth of disability, increase of the share of mature age workers in production and inaccessible health care. There will be no modernisation of production, as there is no incentive for this because of the growth of cheap labour force ready to any job at any conditions.

Thus, a breakthrough is out of the question.

The decision of the State Duma along with a failed foreign policy and ineffective economic policy, a sick political system and a management crisis will become an additional stagnating factor for all the sectors in the country.

Source: https://www.facebook.com/EmiliaSlabunova/posts/1967990913499317