Kremlin Anticipates Continued Salary Growth in Russia
The Kremlin has announced expectations for ongoing growth in Russian salaries, with Deputy Head of the Presidential Administration Maxim Oreshkin stating that there will be no return to cheap labor in the economy. Speaking at the forum "Productivity 360" on October 17, Oreshkin emphasized that the current dynamic of wage increases is a response to a tightening labor market, characterized by a significant drop in unemployment.
Recent figures from the Ministry of Economic Development indicate a 9.2% real increase in average salaries from January to July 2024 compared to the same period in 2023, reaching over 85,000 rubles. This trend is attributed to a historic low in unemployment, which has hovered around 2.4% since June, marking the lowest level in the post-Soviet era. Experts suggest that this situation is exacerbated by an aging population and a decline in the number of young workers, stemming from demographic shifts and historical events.
Labor Market Dynamics and Competition for Skilled Workers
As the competition for skilled personnel intensifies, many companies are enhancing their compensation packages, particularly in sectors like manufacturing and mechanical engineering that benefit from government contracts. Georgy Ostapkovich, director at the Center for Market Research, noted that industries reliant on government orders provide stable finances, leading to higher wages and a shift of workers from lower-paying sectors like agriculture and transport.
President Vladimir Putin echoed these sentiments at the Eastern Economic Forum, highlighting the need for increased labor productivity and technological advancement to address the labor shortage. He proposed initiatives to boost the birth rate and improve workforce training to meet the evolving demands of the economy.
Strategic Initiatives to Address Labor Shortages
To combat the labor shortage, the Russian government has initiated a national project called "Personnel," which aims to invest significantly in education and vocational training. The project plans to allocate 120 billion rubles for educational infrastructure improvements and 400 billion rubles for constructing new university campuses by 2030. Additionally, the government is focusing on updating educational programs to produce approximately 1 million specialists in critical sectors by 2028.
Putin emphasized the importance of achieving technological sovereignty and enhancing human capital through education, science, and healthcare. Experts believe that modernizing outdated equipment in manufacturing will also help increase labor productivity, thereby addressing the current workforce challenges. Minister of Economic Development Maxim Reshetnikov highlighted the potential for attracting young talent and integrating underrepresented groups into the labor market as key strategies for enhancing economic growth.
