Labor Potential of the Russian Arctic

Together with natural--‐recourses, production and financial potentials, the labor potential of society is considered to be an important part of economic development and the base of the mod--‐ ern market economics on both regional level and on a global scale. When researching labor poten--‐ tial of the country and its region many scientists note that these are concerned labor resources, issuing in the aspect of its quality and quantity parts community. Methodologically as the base in--‐ dicators of labor potential development, L.A.Popova and M.A.Terentyeva, for example, are issuing 1) activity rate in common population; 2) level of education, professional performance, occupa--‐ tional retraining, qualification and experience, which act to raise efficiency of the employee; 3) level of salary; 4) conditioning with needful issues and instruments of labor; 5) level of employ--‐ ment and labor activity [1].

Anyway, labor market and its potential volume in regions is determined by quantity of re--‐ gion’s activity rate, and market development determinants are factors and labor demands, situat--‐ ed on its territory. When analyzing the labor potential of northern territories it would be rather viable to consider questions, which answers are to be the first for securing of sustainable devel--‐ opment of labor market, and as a result for increasing of innovational attractiveness of the region demographic and migration processes, influence of low living level on development of labor po--‐ tential of arctic countries of the RF. Under region in this article we understand territorial entity of the RF (region = territorial entity of the RF).

It is crucially important to define the target of research because of wide development of the concept “Northern Arctic region” (NAR). The target of research in this article is 2 territorial en--‐ tities of the RF including 3 republics, 3 autonomous areas, 2 regions and Krasnoyarsk Krai. This “region” can’t be called “Northern--‐Arctic” as it initially has a greatly wide international definition. It usually includes territorial entities of only RF. It is absolutely not understandable why in the Northern--‐Arctic region are not included provinces and states of Canada, Norway, USA, Sweden and other northern and arctic countries, which are also situated in the Arctic and on the North of our planet. To unite two transnational macroregions Arctic and the North into the one “Northern--‐ Arctic region”, it is important as minimum to give scientific credence in this way to the definition of such a common “region”, and particularly, macroregion — its unity and characteristics, which mark this region from other territories. As it was noticed in the XVI Solovetsky Forum, there is still no such credence, but the formation of myths prospers [3].

In official Russian documents Arctic and the North are used independently on their own and don’t possess the same region. Russian Arctic includes 9 territorial entities of the RF, in com--‐ parison with the North of Russian which contains more than 20 territorial entities of the RF. In fact, all the entities of the RF, which fully or partly enter AZRF, are included within the Russia’s High North. According to the executive order of the Russian president № 296 from the 2nd of May 2014, within the RF land territories are included territories of only eight territorial entities of the RF, and also lands and islands situated in the Arctic Ocean, appointed in the act of CEC USSR pre--‐ sidium from the 15th of April 1926 and in other USSR acts1. This article was written when the exec--‐ utive order of the Russian president № 296 still wasn’t signed, so the target of research are not only land territories of AZRF (8 territorial entities), but the whole “Russian Arctic”, which includes 9 territorial entities of the RF, pointed earlier in the project of the federal law about AZRF (2013). Analysis of statistics in such a way is provided all in all within the nine arctic territorial entities of the RF, without statistics of other municipal entities.

Demographic and migration processes

When analyzing the condition of demographic and migration processes in the Russian Arc--‐ tic, we can note the appearing awfully negative situation on labor market. Common population of the investigated 9 northern regions, including all territorial entities of the RF, estimates 2,6% of the Russian population (143,5 mln. people). Economically active population estimates 60% (2,3--‐2,5 mln. people), and it is less than 2% of Russian population. This situation redoubles by the great territorial potential of 9 arctic regions of the RF (4,3 mln. square km), which possesses one fourth of the whole Russian space (17,1 mln. square km.). With such an extension, the population density is exceptionally low and erratic. Speaking about population distribution, the investigated northern macroregion, which mostly includes entities of the Russian Arctic zone, is characterized by explicit irregularity of populating (pic.1).

Pic.1. Structure of the whole population of 9 territorial entities of the RF. Sources: Federal State Statistics Service / official web. URL: Government of the Arkhangelsk region/official web. URL:

According to the data of Federal State Statistics Service, the biggest population density is characteristic for the most economically and infrastructure developed territory — the Murmansk region, where the density index is 5,4 people pro square km. The medium population density is in the Arkhangelsk region (3,25 people/sq. km) and Komi Republic (2 people/sq.km). And the small--‐ est is in the Nenets Autonomous Area – 0,24 people.

But all in all the issued northern regions — are small populated territory with removed cit--‐ ies and with rate of density on 1 sq. km is 0,88 people/sq. km (table1), what is less than Russian index in 9,5 times.

Table 1

Population density of 9 northern Russian territorial entities in 2013
Russian territorial entities	Population density, people/ sq.km
Karelia Republic	3,68
Komi Republic	2,10
Arkhangelsk region	3,25
Nenets Autonomous Area	0,24
Murmansk region	5,39
Krasnoyarsk Krai	0,49
Saha Republic (Yakutia)	0,38
Chukotski Autonomous Area	0,04
Yamalo--‐Nenets Autonomous Area	0,07
Common density	0,88

Source: Federal State Statistics Service / official web. URL:

For northern territories it is characteristic the decrease of population. From 1990 to 2011 population of the whole North of Russia decreased from 9,8 mln. To 7,9 mln. people, that means that the common loss of northern territories arranged 1 mln. 840 thousand people. By that the European part includes 67,6% of loss, the Asian one — 32,4% [2, Fauzer V.V.]. Identical processes take place in the Russian Arctic as well, which is the integrated high--‐latitude part of the Russian North. The greatest losses in the European North got Murmansk region — 396 thousand people (33,2% from the common population in the year 1990). Then follow Komi Republic — 349 thou--‐ sand people (27,9%); Arkhangelsk region — 351 thousand people (22,3%); Karelia Republic — 148 thousand people (18,7%) [2].

By this labor rates because of population decline also labor potential of the Arctic territory decreases in the 21st century.

Lowering of population density of the northern regions is noticed by both natural loss and migration outflow. A migration outflow of population undermines the “miserable” labor potential, which represents the territory of the country with extreme conditions of life and work, based on natural--‐climate and undeveloped economic--‐geographical conditions (vehicle access, level of social infrastructure development). A migration outflow shows the world trend of population movement in more comfortable conditions, that means in middle and southern inland, and mostly it appears in northern countries (Sweden, Norway, Canada and north of the USA) [5, pp.97--‐102]. It is important to notice that among the reasons for population decline in the 21st century, which is common for all the 23 northern territories of Russia, there takes place not only natural loss but also an outlined trend for out migration in warmer places and big metropolitan cities [6, pp.178--‐179]. Negative ex--‐ ponent of population increase is also connected with aging of population and migration misbalance of young population. In relatively render habitable of the North, such as Arkhangelsk and Murmansk regions, Karelia and Komi Republics a stable in migration population is formed, rate of old popula--‐ tion is about or even more than 20%. To the youngest regions we can take Yamalo--‐Nenets (7,8%), Chukotski (10,3%), Taimirski (Dolgano--‐Nenets) (10,4%), Hanti--‐Mansyiski (10,6%) autonomous areas, where the age structure until later depended on migration, which kept alive the permanent increase of population and gravity of cohorts of age groups [2].

According to the data of FSSS, such a negative trend will be preserved in the nearest 5--‐7 years. Population decrease is illustrative for Arkhangelsk and Murmansk regions, where the popu--‐ lation decline by the year 2016 will possess 5% and 8% correspondingly to the level of the year 2004. In Komi Republic together with young population we will notice less decline of population, which will be about 2%.

But in comparison with other northern countries there is some advantage. There are more people in the Russian North than in other northern countries. According to this data, Russian North can be currently called extra populated. This advantage can let to save labor potential only by introducing of great actions on infrastructure and transit development of the northern territo--‐ rial entities of the RF, formation of highly remunerative production in oil--‐and--‐gas, pulp and paper and machine building complexes, education of science--‐technical and innovational clusters.

The other positive moment in formation of labor potential on the Russian North is consid--‐ ered to be a minority stake of incapacitated persons in comparison with Russian data. Rate of able--‐bodied citizens on the north contains 66,5%, and Russian index is 62--‐62,5%2. More able--‐ bodied citizens are in Murmansk region (69,2%) and Komi Republic (67,2%), and the least is in Ar--‐ khangelsk region (64%) 3. For NAA another trend is characteristic, which appears in natural increase of young population, who was formed as a result of later migration (in 80--‐90s) and higher birth rate of indigoes population4.

Employment and economic activity of population

An important direction of labor potential development is considered to be the increase of population employment, what is connected with labor demands of productions, and they deter--‐ mine level of employment on labor market, which is nowadays a little higher than the Russian one. So, level of employment on the North of Russia in the year 2012 (table 2) was 65--‐67% (in arctic territories — 71--‐72%) by average in the RF 64% (в 2000 г. — 61,9%, 66,5% and 58,5% correspond--‐ ingly) 5.

Table 2 An average number of employed in territorial entities of the RF pre year, thousand people 2000 2005 2011 2012 Russian Federation 65070,4 68339,0 70856,6 71545,4 Central Federal District 18014,4 19159,4 20056,9 20382,6 North--‐Western Federal District 6684,3 7139,8 7280,3 7346,9 Karelia Republic 338,0 339,3 310,7 306,9 Komi Republic 481,9 479,1 456,9 460,2 Arkhangelsk region 634,4 657,0 622,8 602,0 Nenets Autonomous Area 19,8 20,8 20,7 21,2 Murmansk region 469,6 465,3 430,7 434,6 Southern Federal District 5850,8 6163,8 6486,8 6559,6 North--‐Caucasian Federal District 2604,0 2975,7 3791,4 3898,6 Privolzhsky Federal District 14242,8 14536,5 14800,8 14883,2 Ural Federal District 5720,0 6019,0 6102,3 6158,7 Yamalo--‐Nenets Autonomous Area 274,0 286,5 310,6 321,6 Siberian Federal District 8784,6 9162,2 9133,4 9116,8 Krasnoyarsk Krai 1360,4 1452,4 1420,8 1428,8 Far--‐Eastern Federal District 3169,5 3182,6 3204,7 3199,0 Saha Republic (Yakutia) 430,6 441,2 447,9 460,3 Chukotski Autonomous Area 32,3 31,2 30,8 31,5 Source: Federal State Statistics Service/official web. URL:

It is also important to notice that in spite of negative migration process and decrease of population rates, the index of employment after the cutback of economic activity 2008--‐2009 has a positive dynamics on the northern territories of Russia (pic. 2).

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

^^^^™ Северо-Западный федеральный округ ^^^^^в Российская Федерация

Рic. 2. Dynamics of population employment in Russia, thousand people//Federal State Statistics Ser--‐ vice/official web. URL:

An illustrative mark of Northern labor market is considered to be the positive dynamics of population economic activity, which is higher that Russian average index. All in all for an issued region the level of economic activity for the last 2 years arranged 71--‐72% (on arctic territories — 76%) by the average Russian level 68--‐69% . These indexes for the last decade grew on 1--‐3% (table 3).

Table 3 Level of average population economic activity on the territorial entities in the RF, %

	2000	2005	2011	2012
Russian Federation	65,5	66,0	68,3	68,7
Central Federal District	65,9	66,6	69,2	70,0
North--‐Western Federal District	66,4	68,8	71,4	71,5
Karelia Republic	67,0	67,9	67,9	66,9
Komi Republic	67,2	68,6	70,4	70,8
Arkhangelsk region	68,0	67,8	69,5	68,0
Nenets Autonomous Area	73,8	72,9	71,6	71,7
Murmansk region	72,1	72,8	73,9	74,9
Southern Federal District	62,8	62,5	65,1	65,6
North--‐Caucasian Federal District	61,2	62,2	64,6	65,3
Privolzhsky Federal District	65,9	65,8	68,4	68,6

Ural Federal District	66,6	67,3	69,8	70,1
Yamalo--‐Nenets Autonomous Area	80,5	76,3	78,1	79,0
Siberian Federal District	65,0	65,9	66,9	66,6
Krasnoyarsk Krai	67,3	70,4	68,3	68,6
Far--‐Eastern Federal District	68,2	66,5	69,6	69,6
Saha Republic (Yakutia)	69,9	68,1	68,1	69,8
Chukotski Autonomous Area	76,0	78,8	83,0	82,5

Sources: Federal State Statistics Service/official web. URL: , Government of Arkhangelsk region/ official web. URL:

Living standards of the population

Perspectives of Russian Arctic labor market and its labor potential development depend on socio--‐economic constituent, which is mostly evident in squaring of labor price and determine the quality of population living. Analysis of average rated wage paid data in Arkhangelsk region from the year 2000 shows the trend to rapprochement of salaries in northern and arctic territories with average Russian ones, what demonstrates the lowering of efficiency of already existed system of regional regulation of labor compensation (table 4).

Table 4

An average rated wage paid, rub.

	2006	2007	2008	2009	2010	2011	2012
Russian Federa--‐ tion	10634	13593	17290	18638	20952	23369	26629
Arkhangelsk re--‐ gion	11725	14400	18181	20243	22189	24609	28900

Source: RF Treasury / official web. URL:

The last year was illustrator, when the average salary in some northern territorial entities became less than the average Russian one. For example, in Arkhangelsk region by the 1st of Janu--‐ ary it was 39340 rubles for 1 person, and in Russia the average number was 39665 rub., and by the end of the half year 2013 — 30218 rub. и 33103 rub. correspondingly6. But there is also a great differentiation by both density and by level of salary. So, in the Nenets Autonomous Area a monthly average rated wage of people who work in the sphere of economics was in the year 2012 242,4% from the average in Russia. But the index of average salary, accounted separately from private consumption, doesn’t give a real economic view of population living quality, which pro--‐ motes the formation of labor potential. Comparison of salary with a living wage of able--‐bodied citizens shows that North takes the leading place in regions by economic poverty. 2011--‐2012 for about 9--‐10% members of productions, organizations and offices of the Russian North got wages smaller than the living wage of able--‐bodied citizens, average in arctic territories — 5%, average throughout Russia — 13--‐14% (tables. 5 и 6).

Table 5

Personal income, rub.

	Including Arkhangelsk region Nenets Autonomous Area 2012г.        2011г.       2012г.        2011г. IV qtr.           IV qtr.          IV qtr.           IV qtr.
An average personal income to the rate of the whole population living wage	324,6         305,3         531,6          585
An average monthly salary of one person to the rate of living wage of able--‐bodied citizens	355,9         330,3         482,5         438,5

Source: Government of Arkhangelsk region / official web. URL:

High level of economic poverty is estimated in Arkhangelsk region (17%), Saha Republic (Yakutia) (14%). The lowest poverty according to the analyzed statistics is noticed in Yamalo--‐ Nenets Autonomous Area (2,6%).

Table 6

Living wage, rub.

Territorial entity	4 qtr. 2012		3 qtr. 2013
	For a person	For able--‐ bodied citi--‐ zens	For a person	For able--‐ bodied citi--‐ zens
Russian Federation	6705	7263	7429	8014
Karelia Republic	7633	8274	8478	9114
Komi Republic	8293	9924	9496	10113
Arkhangelsk region	8159	8880	9698	10420
Nenets Autonomous Area	12562	13655	15689	16361
Murmansk region	9315	9590	10241	10723
Krasnoyarsk Krai	7715	8268	8661	8914
Saha Republic (Yakutia)	10682	11572	11531	12514
Chukotski Autonomous Area	12157	12401	13092	13388

Yamalo--‐Nenets Autonomous Area	10851	11337	12370	12837
Leningrad region	6155	6450	6415	6757
Moscow region	7223	8035	8257	9218

Source: RF Treasury / official web. URL:

M.R. Moskalenko and E.M. Kropanaeva when analyzing specialties of human capital and development of the Russian Arctic underlined that salary of Russian Arctic macroregion citizen is 3--‐4 times lower than of the citizens of other developed countries in Arctic. When a Russian has demands to living quality (consumption, comfort, education) near to the demands of developed country citizen that evidently means that he has to work more, even overtime, to provide at least partly all the increasing demands [7].

Many quality indexes of labor resources leave much to be desired. L.A. Popova and M.A. Terentyeva noticed in their article that in most of northern regions the expected lifetime of popu--‐ lation is traditionally lower than the average in the country. Correspondingly, the labor lifetime is lower. The only exception are Hanty--‐Mansiysk and Yamalo--‐Nenets Autonomous areas, where high rates of lifetime are due to low mortality of working age males from endogenous reasons because of their groundbreaking rotation and low mortality of old population, that means «challenge of death» in southern regions [1]. Also in most of northern regions not only index of professional ed--‐ ucation of occupied population is lower than average but also rate of its increase in years 2002--‐ 2010.

In scientific literature it is also underlined that phenomenon of economic poverty appears as a reaction on socio--‐economic system of the northern region, on imperfection of its functioning institutional conditions. An institutional factor plays especially important role in formation of eco--‐ nomic poverty because on the northern territories function state and specifically northern insti--‐ tutes which possess a number of fundamental defects. By that, the main role plays the imperfec--‐ tion of regulatory guarantee system functioning and compensations affairs for people who work in the regions of the RF North and Arctic, including lack of regulatory acts which allocate the list of the RF North and Arctic regions, definitions and rate of regional salary coefficient, rate of prorated increases according to reference of the territory to the region of the RF North and Arctic; and to the work experience on productions and in organizations situated on these territories [8, pp. 180--‐ 181].

In socio--‐economic development of Russian northern and arctic territories there are a number of other problems. Quality of labor resources, population life--‐sustaining activities, social identity, problems of human capital concentration are still the main arctic challenges for the modern Russia. A danger appears that population of Russian Arctic could not only become the factor of moderniza--‐ tion but also will not be able to support the infrastructure of AZRF economics even on the current, not so high [4].

Conclusion

Labor resources provide formation of national and regional inputs in modern conditions of transition to innovation development of economics. Increase of labor resources potential and also concentration of human capital are considered to be the main direction of longstanding socio--‐ economic development of the Russian Federation. This article introduces only some part of under--‐ taken research of labor market of nine northern and arctic regions of Russia, but even this analysis shows that there are acute problems and difficulties in development of labor market and its po--‐ tential. Labor market of the North, including arctic territorial entities of the RF, doesn’t answer modern conditions of innovational development and becomes the deterrent of its socio--‐economic renewal. That’s why efficiency of economy development and increase of its investments attraction depends much on tactic and strategic activities on development and increase of labor potential, of human potential concentration in the Russian Arctic. At any way, this problem needs further investigation and analysis.