Do migrants reduce wages?

“Such Cases” and the Civic Assistance Committee continue to dismantle the myths about migrants. Doctor of Economic Sciences Irina Ivakhnyuk examines a common misconception that the overall level of wages in the sector fall due to foreign workers.

“Such Cases” and the Civic Assistance Committee continue to dismantle the myths about migrants. Doctor of Economic Sciences Irina Ivakhnyuk examines a common misconception that the overall level of wages in the sector fall due to foreign workers.

Nominally the monthly wage of foreign workers is almost equal to the salary of Russian citizens employed in similar jobs. But foreign workers, especially low-skilled and unprotected labor contracts, basically do not apply labor law norms. They work for 10-12 hours, almost no days off, and often the employer does not pay them social contributions.  It is appropriate to note here that legislative guarantees of wage parity and social security of Russian and foreign workers, if they exist and are put into practice, this “trump card” violates the principles of fair competition, and it disappears as a practice.

In many countries, comparative studies have been conducted on the dynamics of wages in those sectors of the economy where the proportion of migrants is high and those where they are absent or relatively small. In industries where foreign labor is massively used, wage growth does indeed occur more slowly than in the economy as a whole. But during periods of economic recession, restraining wage growth allows you to maintain the competitiveness of the industry and keep enterprises afloat, experts say. In periods of economic well-being, wage growth is observed in all sectors of the economy.

The economic statistics of Russia disproves the myth that migrants reduce the general level of wages. In the 2000s, about 40% of all work permits for foreigners were issued to the construction sector, that is, the share of foreign labor in this industry was significantly higher than in the economy as a whole. But for 2001–2008, the average salary in the construction sector increased more than fivefold: from 3,606 to 18,574 rubles. During the economic crisis of 2009-2010, and especially after 2014, wage growth in construction slowed down and began to lag behind the general growth in the economy, but here, it was due to crisis factors.

In 2010, the All-Russian Public Opinion Research Center and the “Opora Rossii”  All-Russian Public Organization of Small and Medium-Sized Business conducted a large-scale survey of employers about the attractiveness of foreign labor for large and medium-sized businesses. Up to 90% of respondents, as reasons for attracting foreign workers, noted the shortage of national cadres of the necessary qualifications and the refusal of Russian workers to take up jobs suggesting hard, monotonous work. The reasons related to savings in wages and taxes, according to the data of this survey, are much less significant. 40% of polled companies expressed this motivation.

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For over 30 years, Committee of Civic Assistance has been helping migrants who find themselves in difficult situations. At the end of 2011, human rights defenders launched the Hate Crimes project where the organization provides free legal and humanitarian assistance to victims of violent hate crimes.