According to Russian Labor Minister Anton Kotyakov, the country needs to find the equivalent of 2 million workers per year over the next five years if the country’s industries are to fill vacancies left by people who are due to retire.
This was the message the minister delivered to President Vladimir Putin at a meeting on Monday, July 14.
Russia’s Next Economic Crisis: Demographics Disaster…
“By 2030 we need to bring 10.9 million people into the economy,” Kotyakov said at the televised meeting to discuss demographic policy. “Approximately 800,000 will be new jobs created, and about 10.1 million people will be those reaching retirement age,” he told the former KGB Lt. Col.
Putin has been warning for years that Russia’s dwindling population threatens its political and economic future. In response, Moscow has invested billions in programs aimed at boosting the birth rate. These efforts have even included making payments to women just for having more children.
Unemployment is already at a record-low 2.2%, which makes it challenging to find additional skilled labor to begin with. Then there is the war in Ukraine, which only exacerbates those labor shortages. Therefore, the solution to Russia finding the people it needs to fill the growing demand for workers remains a significant and growing question.
Telltale Signs
Potatoes are one of the go-to staples seen on any Russian dinner table. Potatoes are so popular that the planting process in private vegetable plots is a yearly family ritual in most households in the former Soviet republics. The vegetable features in so many dishes that when then-Soviet leader Mikhail Gorbachev met with then-UK Prime Minister Margaret Thatcher, his wife Raisa explained how she had 300 different recipes for preparing them, but that there were at least 200 additional ones she had not yet tried.
One of the telltale signs that labor shortages are reaching serious proportions in Russia is that the unavailability of potatoes at times is pushing their price up 167 per cent over the past year, the highest price rise for any food in the country.
“We’re basically already on the brink of falling into a recession,” Russian economy minister Maxim Reshetnikov told a conference recently. The strain [due to labor shortages] is definitely starting to show, says Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center.
“Slowing economic growth coupled with high inflation leaves Russia close to stagflation,” says Prokopenko, a former adviser at Russia’s central bank.
An economist at one of the major European banks, who spoke to the Daily Telegraph but requested not to be named, said Russia’s economic future was still somewhat unclear.
“The momentum is much slower than it used to be. If we look at the deficit, it has been widening. That suggests that despite the fiscal support, which is most likely aimed at military-related areas, the Russian economy is clearly not as robust as it used to be,” he said.
This is interpreted as meaning that Putin’s war economy is likely at maximum output and cannot surge any higher.
“The potential to draw more people into the army and military production has been used. There is a limit to how many shifts people can work in factories, producing munitions and military uniforms,” he continued.
Concealing the Truth on Russia
One of the unspoken truths about Russia is that, thanks to poor economic performance and the COVID pandemic, the country was already in the middle of a demographic crisis before the war in Ukraine began.
But the more than one million casualties that Moscow’s troops have suffered in the past three and a half years have exacerbated an already unstable situation.
And now, the Russian state has ceased releasing demographic data on its population. Another telltale sign that the statistics have a grim tale to tell is that they must be kept hidden.
The Russian Federal Statistics Service published a socio-economic report for the first five months of this year last week, omitting its traditional demographic section, according to a recent article on the subject. The most recent available data is for the first quarter of 2025, when the number of deaths in the country as a whole significantly exceeded the number of births.
“Starting from March 2025, there are almost no public demographic statistics,” said the independent demographer Alexey Raksha. The statistics in full are available only to state experts, who analyze them with the stamp “for official use only,” he said, which means they are barred from public release.
“The trends in Russia are all headed downward,” said a colleague who used to be assigned to his paper’s Moscow bureau. “It is only of question now of when and where they will intersect.”
About the Author: Reuben F. Johnson
Reuben F. Johnson has thirty-six years of experience analyzing and reporting on foreign weapons systems, defense technologies, and international arms export policy. Johnson is the Director of Research at the Casimir Pulaski Foundation. He is also a survivor of the Russian invasion of Ukraine in February 2022. He worked for years in the American defense industry as a foreign technology analyst and later as a consultant for the U.S. Department of Defense, the Departments of the Navy and Air Force, and the governments of the United Kingdom and Australia. In 2022-2023, he won two awards in a row for his defense reporting. He holds a bachelor’s degree from DePauw University and a master’s degree from Miami University in Ohio, specializing in Soviet and Russian studies. He lives in Warsaw.
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