Russia: Because soldiers are missing, the military pays higher salaries

Russian President Vladimir Putin clinks glasses with Russian soldiers after awarding them the Gold Star medal on the eve of Heroes of the Fatherland Day at the Kremlin in Moscow, December 8, 2022. Mikhail Metzel/Getty Images

Russia has a labor shortage because of the war with Ukraine.

The Russian military pays more in signing bonuses and salaries than the oil and gas sector.

Russia’s oil and gas revenues have filled its war chest.

This is a machine translation of an article from our US colleagues at Business Insider. It was automatically translated and checked by a real editor.

Russia is facing a labor crisis as the war with Ukraine drains workers from the country’s economy.

The labor shortage has become so dire that the Russian military is now offering signing bonuses and salaries so competitive that even the country’s lucrative oil and gas industry can’t keep up, Bloomberg reported.

According to Bloomberg calculations based on official data, since 2017 the Russian oil and gas industry has paid wages that were at least two-thirds higher than the national average wage. That is no longer the case.

In January and February, workers in the Russian oil and gas sector received around 125,200 rubles (1,270 euros) as nominal monthly wages, the media company reports.

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But the Russian army is now offering incentives for contract soldiers, including a nationwide enlistment bonus of 195,000 rubles (1,970 euros), according to a Russian government portal reported. According to Bloomberg, each region of the country offers an additional one-time payment of up to one million rubles (10,130 euros).

The salary of a contract soldier starts at 210,000 rubles (2130 euros) per month. This means that people who enlist for war receive a bonus and a monthly salary that is higher than a monthly salary in the oil or gas sector.

The competition that the Russian military poses to the oil and gas sector is extraordinary because the country is a major energy producer and the industry’s robust revenues have filled Moscow’s war chest. It also highlights how Moscow’s war in Ukraine – now in its third year – is draining resources from the rest of the Russian economy.

Moscow-based Kasatkin Consulting, formerly Deloitte’s research center, estimates that Russia’s oil and gas industry will be short 40,000 workers this year, Bloomberg reports.

“The shortage of personnel has affected even the wealthy industries,” Alexei Zakharov, the president of Superjob.ru, an online recruiter, told the media outlet. “The oil and gas sector can afford to recruit employees with higher salaries, but the state competes by offering military contracts.”

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Putin is urging Russians to have more children

The labor shortage in Russia is not only due to mobilization for war. After the start of the war there was a massive exodus of skilled workers – the has now reversed somewhat – and a demographic crisis was already apparent before the conflict began.

Over and beyond estimated the United Kingdom last month that about 450,000 Russian military personnel have been killed or wounded since the war began in February 2022. This does not include those killed while serving in private military companies.

The demographic crisis in Russia is so dire that Russian President Vladimir Putin has encouraged women to have more children to ensure the people’s survival.

“If we want to survive as an ethnic group – or as ethnic groups inhabiting Russia – we must have at least two children,” Putin said at a tank factory in February.

Read the original article in English here.

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