Moscow Focusing Its Attention on Non-Working Russians to Address Labor Shortage

Executive Summary:

• Moscow is mulling how to attract or force Russians not officially employed into the workforce in response to a growing labor shortage resulting from demographic decline, the difficulties of attracting and retaining immigrants, and the Kremlin’s military expansion.
• The Kremlin presents the effort to employ more Russians as primarily an anti-corruption measure because many “unofficially employed” individuals earn money in the shadow economy.
• Some of the measures being considered, including eliminating gender restrictions on certain jobs and equalizing the gender pay gap, will probably be welcomed, but the push as a whole is likely to be viewed as an unpopular restoration of Soviet-era labor policy.

Russia is experiencing a labor shortage, and it is not only due to unyielding demographic decline (see EDM, April 29). Rising levels of xenophobia mean less ability to attract and retain migrant workers, and Russian President Vladimir Putin’s immense expansion of the military to fuel his war against Ukraine has taken men out of the labor pool (see EDM, June 30, 2022, October 24, 2023, November 21, 2024). According to a Higher School of Economics Study published on May 11, this shortage has risen by 17 percent since last year, now at a record level, and will continue to rise (The Moscow Times, May 12). Instead of working to boost the productivity of currently employed workers, the Kremlin is developing a program to attract or force the estimated 15 million working-age Russians who are not employed by officially registered companies into the workforce (RBC, April 28). 

Moscow is first and foremost presenting this program as an anti-corruption measure since many of those not officially employed earn money in the “shadow” economy. Any program forcing people into official employment may spark ethnic tensions since unofficial employment is more common in non-Russian areas such as the North Caucasus (Kavkaz.Realii, March 20, 2024; Rosstat Federal State Statistics Service, November 2024). Given the massive scope of the Russian labor shortage, economists suggest that any effective program must be expanded to include typically less employed groups such as students and female homemakers (RBC, May 8). Some of the measures now under consideration by the Russian lawmakers are likely to be popular, including the almost complete elimination of gender restrictions in employment and the reduction or even end of pay differentials between men and women (IQ Media, March 8, 2021).. The push as a whole, however, may be negatively viewed as a restoration of Soviet-era labor mobilization policies, which peaked during World War II (RBC, January 1, 2021; Official Publication of Legal Acts, February 6).

On April 25, the Russian government approved a plan developed by the Russian Labor Ministry to attract some of the 15 million working-age Russians who are not officially employed into the workforce. The plan, which covers the next three years and replaces an earlier one that covered the three years prior, has not been published, indicating its sensitivity. RBC news, however, has a copy of the plan, and sources involved in its development confirmed it is genuine (RBC, April 28). The new policy focuses on combating “illegal employment” but has the larger goal of bringing many of the 15 million “non-working” working-age Russians into the workforce (RBC, April 28).

The Labor Ministry will prepare an analysis of the number, age, and gender of working-age Russians who are not officially employed by July 15. It will work with other government bodies to formulate a program to attract officially unemployed individuals into official employment and send that plan to the Council of Ministers for approval by March 1, 2026 (RBC, April 28). Of the 14.9 million Russians that Rosstat, the Russian government statistics agency, identified as not officially employed, 11.8 million did not express a desire for employment, either because they were students (six million), pensioners (2.1 million), or homemakers (1.6 million) (RBC, May 8). In October 2024, Rosstat reported that 1.8 million Russians are officially unemployed (TASS, November 27, 2024). The official Russian unemployment figure is unlikely to change as a result of the new policy—reporting absurdly low unemployment figures has long been a feature of Moscow propaganda at home and abroad—but the employment policy itself will attempt to get the nearly 13 million other Russians to join the workforce. If the Kremlin can bring these individuals into the workforce, it would compensate for the effects of demographic decline and the departure of most of the migrant workers on the Russian economy, at least in the short term. 

According to Aleksandr Safonov, an expert on employment at the Financial University under the Government of the Russian Federation, “a significant share” of those counted as not working are actually employed part time, in the shadow sector, independently, or as contractors (RBC, April 28). Many of these people are not counted because of the difficulty of assessing their numbers. A large number, mostly consisting of mothers with children at home, however, are not in either of these categories, but caregivers (RBC, February 8). Pulling them out of the home to work would require enormous sums for childcare and would challenge Putin’s commitment to the promotion of so-called “traditional values.” Safonov continues that it is therefore unlikely that full-time caregivers could become a significant source of new employees for the officially registered economy anytime soon unless draconian actions were taken, actions certain to provoke outrage (RBC, April 28). He has offered his own proposal for dealing with the issue, suggesting that the government should tax the unemployed (Govorit Nemoskva, May 12). 

Elena Varshavskaya, a labor expert at Russia’s Higher School of Economics, notes that plans to get women in the workforce focus on women between 30 and 55, whose children are older and require less care (RBC, February 8). The gender pay gap has been widening in Russia since Putin’s full-scale invasion of Ukraine. Varshavskaya argues that eliminating restrictions on female employment and working to narrow the gender will bring more women between 30 and 55 into the workforce will not be effective at bringing more stay-at-home mothers into the workforce (RBC, January 1, 2021, January 23, February 8; Official Publication of Legal Acts, February 6).

Since RBC’s piece revealed that nearly 15 million able-bodied Russians are not officially employed, other Russian media outlets have used the old Soviet term “parasite” to describe unemployed working-age individuals (RBC, April 28; Tvtver.ru, May 9). If the attitude that able-bodied Russians who are not officially employed are “parasites” spreads, there will likely be more calls to force them to work. The intensity of the rhetoric around this issue demonstrates the seriousness of Russia’s labor problem. The Kremlin’s choice to approach labor shortages by attacking unemployment rather than improving the productivity of those currently employed may become a significant source of conflict between the Russian people and the Putin regime as the dimensions and meaning of the government’s plan become more apparent in the run-up to the 2026 Duma campaign.