Russia is desperately short of hands to do the work

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  Geert Groot Koerkamp

  Russia correspondent

Like the Netherlands and many Western countries, Russia has an acute shortage of workers, and here too this is a problem that will only increase in the coming years. These dire tidings also reach the Kremlin, where people like to harp on the successes of the Russian economy in times of war and Western sanctions.

President Putin calls the deficit “one of the main obstacles to our economic growth.” “We live in the largest country in the world, but there are few of us,” his spokesman, Dmitry Peskov, agreed.

According to the Russian Central Bank, 73 percent of Russian companies are experiencing a shortage, other estimates say as much as 90 percent. Bank president Elvira Nabioellina recently reported that first figure in parliament.

She also said unemployment is at an all-time low of 2.4 percent. A flattering figure, indeed, because Russia has had significant hidden unemployment for decades.

But the desperate shortage of hands to do the work and keep the economy running is evident. As elsewhere, the cause is largely due to the demographic situation. Russia is also aging and is still feeling the aftershocks of the Second World War, causing the country to slip into a demographic ‘hole’ every roughly 25 years, a period in which the number of births decreases.

This effect is sometimes reinforced by negative socio-economic developments, such as the economic downturn and growing mortality rate in the 1990s, or the 2020-2021 corona pandemic, which is believed to have claimed more than a million lives in Russia.

Since the beginning of 2022, hundreds of thousands of men have been withdrawn from the labor market in Russia and sent to the front in Ukraine. And when a ‘partial mobilization’ was declared at the end of that year, it prompted at least another 650,000 people to leave the country. Separately, polls have shown for years that at least 20 percent of young people under the age of 24 would like to leave Russia permanently.

The Russian Academy of Sciences estimated the labor shortage last year at five million people. The shortages are acutely felt everywhere, in the catering industry and construction, in municipal services, but also in the defense industry.

“The labor shortage is colossal,” said Umid Khusandzhanov, manager of a cafe and restaurant chain in Moscow. And it will keep getting worse, he knows. “It probably started with the pandemic and snowballed, adding to it the economic causes, the other events happening in our country and the world right now, plus the demographic deficit.” By these “other events” he also refers to the battle in Ukraine, which Russia prefers not to mention by name.

Attracting workers from abroad is a proven way to overcome shortages. Russia traditionally employs many people from former Soviet republics in Central Asia, such as Uzbekistan, Tajikistan and Kyrgyzstan. Kremlin spokesman Peskov fully acknowledges that migrants are indispensable. “Of course we need working hands, we are only happy with that.”

But despite the growing problems on the labor market, the government is taking more and more measures to limit the influx of labor migrants. That influx had already declined significantly due to the corona pandemic and has never reached the previous level since.

Since the Russian invasion of Ukraine, many migrant workers in Russia have been pressured to sign a contract with the army. Those who had a Russian passport in addition to their original one received a straight call.

And after the bloody terrorist attack on a concert hall on the outskirts of Moscow in March this year, which killed 145 people, immigrants came under even more fire. The main suspects in that action come from Tajikistan, but migrants from other Central Asian countries are also experiencing increasing problems.

According to the Kremlin, all these measures are aimed exclusively at illegal immigration. Among other things, illegal immigrants who commit violations will be punished extra severely, and organizing illegal immigration will be classified as a serious crime.

But especially at the regional level, legal migrants are also experiencing increasing problems in looking for work and are being excluded from many sectors. For example, they are sometimes no longer allowed to work as taxi drivers.

For this reason, and also because of the falling value of the ruble, working in Russia is becoming increasingly unattractive for them. For hundreds of thousands of Tajiks, Kyrgyz and others, this is already a reason to look for work in another region, in the Middle East, East Asia and also Europe.