Employment precarization as a factor of wages differentiation and social wellbeing

Employment conditions (form of labor relations, social security, (un)stability of wages, informal payments, etc.) are a key factor of the social-economic differentiation in the contemporary Russian society, which determines the need to clarify the relationship between the worker’s position in the labor market and one’s earnings. There are many empirical assessments of wage losses for various types of non-standard employment (informal, temporary, part-time, casual, etc.); however, each type is just one manifestation of precarization (as non-guaranteed and unstable employment), which does not present this phenomenon in general. The author considers the relationship between precarization and wages. Based on the data of the all-Russian survey of the working population (2018), the author argues that not all but some features of precarization (lack of indefinite term employment agreement, sick leave and vacation pay) are associated with a lower salary; only a high level of precarization (three or more its features together) significantly reduces wages. Despite the fact that this relationship is partly mediated by the level of education of the employee, precarization still has an independent negative impact on wages. Groups of workers with a high and low level of precarization are heterogeneous in wages which can compensate for the disadvantages of the unstable and non-guaranteed employment situation. Thus, workers can be divided into four groups according to their employment precarization and salaries, which determine their social well-being. The ‘unstable group with wages below average’ shows the lowest level of subjective well-being and social optimism both in life in general and in assessing the labor sphere. The ‘unstable group with wages above the average’ declares a lower level of social well-being than the ‘stable group with wages below the average’, i.e., higher wages do not compensate for the negative consequences of precarious employment which worsens social well-being even provided wages ‘above the average’.