MOSCOW, March 17 (Reuters) - Russian wage arrears rose 16 percent last month, topping 8 billion roubles ($230 million) for the first time in over three years and affecting half a million people, Federal Statistics Service data showed on Tuesday.
Arrears, an indicator of stress for companies and a cause of popular protests in Russia's last economic crisis in 1998, stood at 8.087 billion roubles on March 1, up from 6.965 billion a month earlier and at their highest level since Dec. 1, 2005.
Russian companies are struggling to attract new financing at a time when demand for their goods is falling sharply as the country braces for its first recession in a decade.
After the 1998 crisis, companies resorted to paying workers in goods and wage arrears reached $3.8 billion. Unpaid wages sparked social unrest, and the repayment of arrears was an issue for Vladimir Putin's 2000 presidential campaign.
This time protests have been relatively small scale so far, including about 1,000 demonstrators calling for the government to resign during a peaceful march in Vladivostok on Sunday [ID:nLF3994]. But experts warn unrest could intensify if wage arrears and unemployment continue to rise.
The lion's share of arrears, 93.4 percent, were attributed to companies not having enough cash. The rest was due to not receiving local, regional or federal budget funds on time.
"In the total volume of wage arrears, 47 percent comes from the manufacturing sector, 16 percent from transport, 13 percent from construction and 8 percent from agriculture," the statistics service said in a statement.
Industrial production shrank 13.2 percent year-on-year in February, the second fastest pace of contraction in the series' seven year history, data showed on Monday [ID:nLG557071].
Some 41.4 percent of the current wage arrears date back to last year, while 8.4 percent were accumulated even earlier. (Reporting by Toni Vorobyova; editing by Patrick Graham)