Labor migration will not solve the problems of the Russian labor market

In February 2024, the unemployment rate in Russia, according to Rosstat, once again reached a historical minimum of 2.8%. Analysts unanimously speak about the continued high tension in the labor market, which forces the Bank of Russia to maintain a tight monetary policy and acts as one of the basic restrictions on the expansion of economic activity in the next decade. And labor migration cannot solve this problem.

According to the Ministry of Economy, taking into account seasonality, the number of people employed in the economy in February amounted to 73.8 million people (73.7 million people in January 2024), and the number of unemployed people stabilized at 2.1 million people, having decreased by 20% over the year. Analysts of the Telegram channel “Hard Figures”, based on current data, conclude: “There is no free labor. The difference between the labor force and the need for workers (employed and the number of vacancies) has become zero.”

According to recent estimates presented by Rostislav Kapelyushnikov from the Higher School of Economics in the work “Escalation of vacancies in the Russian labor market (dynamics, structure, triggers)”, based on the Beverage curve (characterizes the labor market based on the ratio of vacancies and unemployment), the rapid jump in vacancy rates was a mirror reflection of the same failure in unemployment indicators at the peak of the coronavirus crisis, which gave rise to an almost continuous “escalation of vacancies.” Now, according to his calculations, the vacancy rate has reached a “strikingly high” level of 7%. “This conclusion is at odds with the views of most analysts, who tend to associate the expansion of vacancies in the Russian labor market with the events of 2022 – mobilization and “relocation”,” he concludes. The escalation of vacancies was universal: there is practically no industry and no professional group where the number of vacant jobs has not increased in recent years, and, as a rule, by several times. This does not confirm the widespread ideas about where the main areas of “personnel shortage” are located in the Russian economy today – the shortage of engineers or programmers can hardly be attributed to the points of greatest tension. In services, the labor shortage is much more acute than in manufacturing.

Although many different factors were behind the explosive growth of vacancies, the author of the study notes, the most important trigger for this is the incentives for large-scale redistribution of labor between industries and individual enterprises, which were given first by the coronavirus crisis and strengthened by the second sanctions crisis. As a result, the structure of demand for labor sharply diverged from the structure of supply, which forced enterprises to open more and more new vacancies in the hope of getting workers or replacing the loss of old ones. There was intense competition in the market for available labor, workers began to willingly change jobs, labor turnover rates (both hiring and attrition) accelerated to historically high levels, and a large overhang of “empty” jobs developed that most businesses were unable to fill. fill quickly or at all.

The growth in real wages, which began only at the beginning of 2023, may serve to cool down the problem of the overhang of vacancies, as was the case in other countries. But the current “limited supply regime” in the labor market is likely to be entrenched for a long time, and the Russian economy will apparently have to exist under the stress of an acute shortage of labor resources, the author of the study concludes. Almost all potentially significant sources of replenishment of the labor force have been exhausted, and the only real reserve remains, in fact, the “import” of labor from abroad. “But even on this path there are serious limitations, given that the main supplier of labor migrants for the Russian economy has traditionally been the countries of Central Asia,” the work notes. The intensification of labor migration, even if it occurs, is unlikely to be significant, and an increase in the share of labor migrants in the total number of employed by 1–2 percentage points will not compensate for the losses in the labor force expected in the coming decades.

Artem Chugunov