Putin’s efforts to boost the Russian economy are facing challenges due to a persistent skills shortage. Despite his intentions, Putin’s actions may be worsening rather than improving the economic situation. The struggle against the skilled labor deficit in Russia is proving to be detrimental to economic growth. The country finds itself in a dilemma as it grapples with inflation, high military expenditures, and the looming threat of overheating the economy.
One crucial issue exacerbating the economic woes is the reliance on migration to address demographic and economic needs. Following the Moscow attack in March, purportedly carried out by Tajik nationals, Russia seems to be reconsidering its immigration policies. Reports suggest that mass deportations of migrants are underway, with security forces targeting individuals with an „eastern appearance.“ The mounting animosity towards Central Asian migrant workers has led to threats, verbal abuse, and discrimination against them.
In light of the skilled labor shortage exacerbated by the conflict with Ukraine, Russia faced a deficit of approximately 4.8 million workers in 2023. Key sectors, including transportation, manufacturing, and construction, are significantly impacted by this shortage. The escalating number of unfilled positions, reaching 6.8% of the total workforce by mid-2023, poses significant challenges for Russia’s economic stability.
Additionally, sanctions imposed on Russia are hindering Putin’s ability to leverage technological advancements to address labor market issues. While striving to enhance productivity, the country faces obstacles due to limited access to technological progress. The current geopolitical landscape is impeding Russia’s ability to make significant strides in productivity and economic growth. Moreover, Putin’s strategy of simultaneously increasing labor productivity and deploying young individuals to military service raises concerns about the feasibility of expanding the army while grappling with the shortage of skilled workers.
