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Russia is experiencing a significant shortage of workers and associated inflation as labor costs push up prices across the country.
The defense sector is short of about 160,000 specialists, Deputy Prime Minister Denis Manturov said last month – and this is despite 500,000 workers switching from the civilian sector to defense-related firms over the last 18 months.
In a bid to attract workers, defense sector companies have hiked salaries, which fuels consumer demand across the whole economy. Salaries are increasing fastest in Russia’s industrial regions on the Volga, and in the Ural Mountains, where there is a large concentration of arms manufacturers. But the labor shortage affects all Russian regions, and almost every industry. There is “a significant shortage of highly-qualified specialists and low-skilled workers alike” all across Russia, the Central Bank stated in a May report, reported Russian news outlet The Bell.
Firstly, there are likely fewer labor migrants. Russia’s natural population decline was traditionally balanced by migrant labor. However, migration in 2023 was at its lowest level since pandemic-hit 2020.
Secondly, the Russian army is recruiting tens of thousands of working-age men.
Thirdly, many people left Russia after the invasion of Ukraine – because they were anti-war, or because they feared being made to fight.
The rise in demand for labor comes at a time when Western sanctions prevent productivity increases, which could ease the worker shortage.
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2 comments
Is this a real labor shortage? Or a fake one like in the US?
Send in the beaners.