November 16, 2020

For the Sake of Russia, You're Fired!



For the Sake of Russia, You're Fired!
Can firing workers really help GDP growth? Image by Ilmicrofono Oggiono via Flickr

GDP is a general measure of a company's economic development. Now a Russian non-profit economic organization has released suggestions for how to grow Russia's GDP: fire ineffective workers.

Experts at the Center for Macroeconomic Analysis and Short-term Forecasting (CMASF)  said that authorities should not prevent such a large-scale firing, and that laws need to be corrected to allow it. According to their experts’ analysis, Russia’s labor productivity needs to grow annually by 4-4.5% in order to reach the government’s goal of 3-3.5% GDP growth per year. Without laying off ineffective workers, these markers will be difficult to achieve, according to CMASF.

There is skepticism whether a large increase in unemployment would actually be beneficial for Russia’s GDP long term. As one news source put it, in real life, it’s rare that the sheep are safe and the wolves are fed. However, experts at CMASF say that if this massive layoff doesn’t happen, the Russian economy will lag behind developed countries by a factor of 2.5 and behind some developing countries by a factor of 1.5.

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