Perspectives

January 21, 2009
Wal-Mart heads to Russia as unemployment soars

Wal-Mart may expand its presence in Russia.

Europe has been hard-hit in the world financial crisis, and unemployment is rising.

But Russia may see more growth than other European countries in the coming months, and some retail giants are looking to Moscow — including Wal-Mart, which plans to expand its overseas presence.

Blogger “Sean” is a graduate student studying history at the University of California, Los Angeles. He writes at “Sean’s Russia Blog” about what Wal-Mart’s presence might mean for Russian jobs.

Russian Unemployment Rising, Fast

Russian unemployment is growing fast, especially in Moscow. Mikhail Nagaitsev, the chairman of the Moscow Federation of Labor Unions, reported on Ekho Moskvy that during the holiday period the number of people registering for unemployment doubled.

Now there are about 290,000 unemployed in Moscow compared to 56,500 a year ago.

Some statisticians are saying that unemployment is perhaps higher that the official 6.6 percent.  According to a survey conduced by FOM, only one percent of Russians register as unemployed when the lose their job making the overall figure probably closer to 7.5 percent.  If correct, that would put the number of unemployed in Russia at 6 million out of 76 million people of working age.  Experts believe that social unrest tends to occur when unemployed surpasses the 10 percent mark.  With officials admitting that joblessness in Russia might increase by 2.1 to 2.2 million people in 2009, that 10 percent mark is inching closer and closer. Couple this with another FOM survey which finds that every fifth Russian not only expects an increase in labor strikes, but are also willing to participate in them and the situation is looking more ominous.

Unemployed, disgruntled Russians might not need to worry too much longer. Walmart has made some serious steps for entering the Russian market.  It’s cheap goods, enormous stores, and abundant service jobs will certain ally the frustrations of any downtrodden public.  But as anyone from small town America knows that box store on the hill is a temple of false gods.  Walmart is cancer to small businesses, acid to the idyllic downtown Main Street, and a snake oil cure for disparity.  Walmart may have branded itself as that blue vested, smiley faced cornucopia of consumerism, but its real face is a low wage and viciously anti-union substitute for the loss of well paid jobs.  I urge Russians to beware.

But Walmart’s penetration into the Russian sales and labor market is still a while off.  In the meantime something is needed to get a grip on any future public disorder.

To read more, see the original post.

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Photo courtesy of Flickr user racineur under a Creative Commons license.

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