Armenia - Labor and the Standard of Living

More about the Economy of Armenia.

Labor and the standard of living

The abrupt termination of economic relations with many former Soviet republics, each concerned with its own immediate needs, forced reduction of the work force and plant closings in Armenia. In the years following, the effects of the Nagorno-Karabakh conflict continued and exacerbated the trend. In 1991 some 39 percent of the active work force was employed in industry and construction; 21 percent in the arts, education, and health; 19 percent in agriculture and forestry; 7 percent in transportation and communications; and 6 percent in commerce and food services.

About 96,000 persons were officially classified as unemployed in September 1993, a 55 percent increase since the beginning of the year. Another 150,000 workers were expected to apply for government support grants before the end of 1993.

About 800,000 Armenians (just under 24 percent of the population) were homeless in 1991. Especially hard-hit by unemployment was the highly skilled work force that had been employed in the Soviet military-industrial complex until that sector of the economy was severely cut in the late 1980s. Conversion of plants to civilian production progressed slowly in the early 1990s; according to one estimate, 120,000 jobs were lost during this process.

In 1988 the Armenian living standard was slightly lower than that of the Soviet Union as a whole. The per capita consumption by Armenians was 12 percent below the average for Soviet republics. Average daily nutritional consumption was 2,932 calories, of which 45 percent was grains and potatoes.

After the fall of the Soviet Union, living standards in Armenia fell precipitously. By the end of 1993, the fall in production, shortages of food and fuel, and rapid hyperinflation had reduced the living standard of an estimated 90 percent of Armenians to below the official poverty line. In the winter of 1993-94, average monthly income was enough to pay for rent and public transportation, plus either ten eggs or 300 grams of butter. Fish and bread, still under price controls, were the only affordable staple foods. Average per capita housing space in 1993 was fifteen square meters.

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