Russia faces labor shortages over Ukraine war

The Russian economy is struggling with record labor shortages as the war in Ukraine increases pressure on it. According to a survey by the Central Bank of Russia, labor availability has fallen to minus 18, the lowest since data collection began in 1998, according to the Russian daily Kommersant reported.

The sectors most affected are manufacturing, water supply, mining, storage and transportation. Auto sales, wholesale and services, on the other hand, were least affected.

Losses and exodus from war

Several factors contribute to the situation. Russia’s population has been shrinking for years. But the war against Ukraine has come as a major shock to the workforce. The military mobilized 300,000 troops last year and plans to deploy hundreds of thousands more this year.

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About 200,000 Russian soldiers were killed or wounded in fighting in Ukraine, with some estimates by 500 soldiers go out a day. By now, almost a million Russians may have left the country for a variety of reasons, whether to escape military mobilization or Western sanctions.

The 14,000 employers surveyed by Russia’s central bank were optimistic about an eventual turnaround and expected seasonal trends to attract workers again in the coming months. An adviser to Finland’s central bank, on the other hand, said Russia is experiencing “reverse industrialization” as Western sanctions against Russia and the ongoing war against Ukraine weigh on long-term economic growth.

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This article was translated from English by Klemens Handke. You can find the original here.