Labor shortage in Russia: dramatic impact on the economy

Labor shortage in Russia: dramatic impact on the economy

According to a report by www.watson.ch,

Countless Russians were drafted into the war in Ukraine. This has a major impact on the job market. The war in Ukraine has turned into a trench warfare. On most sectors of the front, neither the Russian nor the Ukrainian armed forces are able to make significant progress. It is precisely for this reason that the current fighting, especially those in the area around Avdiivka, is particularly stressful for people and material. Many soldiers die for small territorial gains, and the weapons industry in Russia needs countless workers to reproduce used war equipment. The Russian economy, apart from the arms industry, is particularly affected by this - it is running out of workers. The Russian economy and the economy as a whole are at their limits, which is particularly clear from the current labor shortage.

Factories are regressing to the Soviet era
The increase in weekly working hours in the factories appears to be a step backwards to the era of the Soviet planned economy. The defense industry in particular is severely affected by the labor shortage. The state-owned company Rostec complained about the need for workers and said it would have to hire 25,000 to 30,000 people.

There is a shortage of 500,000 to 700,000 IT workers
The Russian IT industry is also suffering from the war, as many IT workers are said to have fled abroad. According to figures from the Russian Ministry of Digital Development, Russia was short of 500,000 to 700,000 IT specialists.

Putin acknowledges problem
Even Vladimir Putin recognizes the problem of a shortage of workers. His economics minister also spoke of the shortage of workers as the “biggest domestic problem for the Russian economy.”

Analysis:
The labor shortage in Russia as a result of the war in Ukraine is having a serious impact on various sectors of the economy. The arms industry is particularly affected because it urgently needs workers to reproduce war equipment. The increase in weekly working hours and the shortage of IT specialists are exacerbating the situation. This could lead to a slowdown in economic growth and affect Russia's competitiveness. Efforts to hire new workers could increase production costs and hurt companies' profitability.

The consequences of the labor shortage could lead to uncertainty in the labor market and a decline in economic output in the short and long term, which could also deter potential investors. It is important that the Russian government takes appropriate measures to address the labor shortage and stabilize the economy.