Armenian Job Sharks Do Brisk Business

Much of Armenia’s job market remains in the shadows as an unofficial labour exchange continues to flourish.

By Karine Ter-Saakian in Yerevan (CRS No. 261, 10-Nov-04)

Yerevan’s “black employment exchange” in the heart of the city pulses with life early in the morning. Middle-aged men carrying materials for the painting and building trades rub shoulders with younger men who are busily making deals.

These young men are the brokers who run most of the business in the market, getting here by six or seven in the morning. By eight, most of the qualified workers have been snapped up and it is only the unskilled labour that remains.

The market has existed since Soviet times, when the authorities tolerated its presence even though it was strictly illegal. That remains the situation now, with the Armenian government turning a blind eye to a market that continues to do business because unemployment is high.

Job-seekers say they came here because looking for work through the official labour exchanges can be very hard.

Onik, 40, lost his job 15 years ago and is a regular at the “black exchange”. “I’ve got a degree in civil engineering, and I worked as a construction foreman until I lost my job,” he told IWPR. “I go to the exchange to find work such as renovating flats or helping out on a building site.”

According to a recent report from the Armenian National Statistics Agency, nine per cent of working-age Armenians - 112,000 people – are unemployed.

But Eduard Agajanov, an independent economist who used to head the state statistics agency, warned IWPR, “This cannot be true. That’s the unemployment level of a highly industrialised economy.

“The real figure is about two and a half times higher. Some analysts actually put it at four or five times [the official number], which translates into half of Armenia’s population being unemployed.”

Agajanov said these higher unemployment estimates included people who did have jobs but should be counted as unemployed since they were neither on a payroll nor paying taxes .

Experts say the shadow labour market is fed by people who are frustrated with the bureaucracy of the official labour exchange, and deterred by the high fees charged by recruitment agencies.

A source at Armenia’s welfare ministry insisted that it was not difficult to find a job, but accepted that doing so through the official route was difficult. “It’s true there are big queues at the official employment exchange, especially if you are a qualified professional. I believe the real unemployment level is at least double the official figure,” said this source, declining to be named.

Onik agrees it is useless to expect the government to find you a job, while private firms are too costly.

“One can go to an official job exchange, sign up and everything, but they will ask you to bring reams of paperwork regarding your marital status, your work career, residence and so on,” he said. “Then you wait for many months. They will pay you unemployment benefit, but you are likely to spend most of it on getting the paperwork they require from you.

“On the other hand, a private recruitment firm will charge you half your first monthly salary; that’s too much. At the black exchange, the brokers charge 20 to 30 dollars, so it’s well worth the trip.”

The “black exchange” operates peacefully, with arguments between brokers and prospective workers rare. The place is divided up, and no one trespasses on anyone else’s patch.

The clientele ebbs and flows according to season, and is influenced by the general situation in the South Caucasus.

Many of the job-seekers have recently returned from Russia and are looking for work again.

“I left Armenia in 1992 and found a job right away in the Saratov region [Russia] building houses and roads,” Ruben, 40, told IWPR. “Then they started treating us badly and I decided to leave. The money I had brought back is all gone. I’ve already found one job here, renovating a private home. I hope I get lucky again.”

Many car mechanics and truck drivers have recently turned up looking for work. The drivers have been hit hard by the recent closure of the Georgian-Russian border, following the Beslan tragedy in North Ossetia in September.

“Nowadays I consider myself lucky if I get to ship some potatoes or cabbages from Tashir [in northern Armenia] or Javakhk [in southern Georgia] once a week.” said Levon, a professional driver.

“Security is very expensive, but if you are driving to Russia, you aren’t going to make it without a security escort. Guards have to be hired from a professional security firm. They charge a lot, but it’s worth it,” said another truck driver.

Ashot Mhitarian, an official at Armenia’s central tax office, said there was an urgent need to regulate the recruitment firms exploiting the job market. “Some of them get incorporated as a public organisation or some kind of small business, in order to pay as little tax as possible,” he said. “And then they go and rip off their clients.”

Mhitarian is positive the “black employment exchange” will continue for a long time to come. “When the unemployment rate really drops to nine per cent like the government says it is, there won’t be any need for this kind of unofficial job forum. But for the time being, all the money that’s being made here is going to stay in the shadows, where the government cannot tax it.”

At the job market, one community is managing to get jobs at a rate quite disproportionate to its size.

These are the Molokans, a small Russian Christian community whose ancestors settled in Armenia in the 19th century. There are just 2,000 of them in Yerevan.

“They work faster; they are neater and more responsible,” explained Georgy Harutiunov, a Yerevan resident looking for workers to renovate his flat. “Although they charge more than Armenian labourers, they provide better quality.”

Major banks and corporations prefer to hire Molokan women to clean their offices. “I’m not saying Armenians can’t do cleaning, but the Molokans do it better,” one bank manager told IWPR.

Ashot Manukian, a foreman at a Yerevan construction site, agreed, “At the exchange, you never know who you’re hiring. The majority of private repair jobs are done by the Molokans these days. They are rock-solid. You can leave them in your house, come back hours later, and nothing will have been stolen. Great workers, too.”

Onik, competing for jobs at the unofficial labour exchange, thinks the Molokans are a sort of mafia that claims all the best jobs.

“But I have nothing against them,” he added. “We’re all earning a living as we can. But sometimes I wonder: are Armenian builders all that bad? How come the Molokans get to do everything?”

A group of Molokans was standing nearby, keeping away from the rest of the job-hunters. “They do that. Keep their distance. They’ll only talk if it’s unrelated to their work. Theirs is a very different life.”

Karine Ter-Saakian is a freelance journalist in Yerevan.