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Russia, a country of around 144 million people, is grappling with a deepening labor crisis that now poses a serious risk to both its economy and long-term stability. The roots of this problem stretch far beyond the current war in Ukraine, back to the collapse of the Soviet Union in 1991.
📉 The Post-Soviet “Russian Cross”
The disintegration of the USSR unleashed a severe economic shock that drove mortality up and births down. Demographers call this turning point the “Russian cross” – the moment on a graph when the death rate line crosses above the birth rate line and stays there. From the early 1990s onward, Russia’s population began shrinking, even in peacetime.
This period left a demographic scar. A combination of low male life expectancy and widespread public health crises – including alcoholism, cardiovascular disease and other preventable conditions – meant millions of men never lived to retirement age. By the 2000s and 2010s, Russia was already an aging society with a steadily narrowing base of working-age people. Government attempts to reverse the trend, from cash bonuses for larger families to pro-natalist messaging, slowed but never stopped the broader demographic decline.
🚀 Accelerator: The War in Ukraine
The full-scale invasion of Ukraine in 2022 pushed this slow-moving crisis into overdrive, turning a chronic structural problem into an acute labor shortage. Several shocks hit at once:
Mobilization removed hundreds of thousands of mostly young men from the civilian economy and sent them into the armed forces.
A wave of emigration, especially among skilled professionals, IT specialists and entrepreneurs, drained human capital as people left to avoid conscription or escape political and economic uncertainty.
At the same time, wartime instability, casualties and a pervasive sense of insecurity made many families postpone or abandon plans to have children, pushing birth rates even lower.
🔔 A Labor Market at the Breaking Point
On paper, Russia’s unemployment rate is at or near record lows. In reality, this is less a sign of prosperity than of a labor market under extreme strain. Compared with earlier decades, millions of workers are effectively “missing.” To keep key industries functioning, the state has turned to increasingly drastic solutions, including the use of prison labor and tighter restrictions on internal movement, in order to staff factories, construction projects and critical infrastructure.
These pressures collide with the structure of Russia’s economy. For years, growth and state revenues have depended heavily on oil and gas exports. This resource-heavy model, which tends to sideline more diverse and higher-productivity sectors, requires a stable supply of relatively cheap labor to sustain extraction, transportation and heavy industry.
Russia, a country of around 144 million people, is grappling with a deepening labor crisis that now poses a serious risk to both its economy and long-term stability. The roots of this problem stretch far beyond the current war in Ukraine, back to the collapse of the Soviet Union in 1991.
📉 The Post-Soviet “Russian Cross”
The disintegration of the USSR unleashed a severe economic shock that drove mortality up and births down. Demographers call this turning point the “Russian cross” – the moment on a graph when the death rate line crosses above the birth rate line and stays there. From the early 1990s onward, Russia’s population began shrinking, even in peacetime.
This period left a demographic scar. A combination of low male life expectancy and widespread public health crises – including alcoholism, cardiovascular disease and other preventable conditions – meant millions of men never lived to retirement age. By the 2000s and 2010s, Russia was already an aging society with a steadily narrowing base of working-age people. Government attempts to reverse the trend, from cash bonuses for larger families to pro-natalist messaging, slowed but never stopped the broader demographic decline.
🚀 Accelerator: The War in Ukraine
The full-scale invasion of Ukraine in 2022 pushed this slow-moving crisis into overdrive, turning a chronic structural problem into an acute labor shortage. Several shocks hit at once:
Mobilization removed hundreds of thousands of mostly young men from the civilian economy and sent them into the armed forces.
A wave of emigration, especially among skilled professionals, IT specialists and entrepreneurs, drained human capital as people left to avoid conscription or escape political and economic uncertainty.
At the same time, wartime instability, casualties and a pervasive sense of insecurity made many families postpone or abandon plans to have children, pushing birth rates even lower.
🔔 A Labor Market at the Breaking Point
On paper, Russia’s unemployment rate is at or near record lows. In reality, this is less a sign of prosperity than of a labor market under extreme strain. Compared with earlier decades, millions of workers are effectively “missing.” To keep key industries functioning, the state has turned to increasingly drastic solutions, including the use of prison labor and tighter restrictions on internal movement, in order to staff factories, construction projects and critical infrastructure.
These pressures collide with the structure of Russia’s economy. For years, growth and state revenues have depended heavily on oil and gas exports. This resource-heavy model, which tends to sideline more diverse and higher-productivity sectors, requires a stable supply of relatively cheap labor to sustain extraction, transportation and heavy industry.
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NewsTranscript
00:00Okay, let's unpack this. We are diving into a topic today that, well, it kind of defies basic intuition about global power.
00:07When you think about Russia, the immediate image is just immense scale.
00:12Absolutely. Vast territory, huge natural resources, and on paper, a population of 144 million people. It's a giant.
00:21But that image, potent as it is, seems really misleading now. Because for decades, Russia's sheer size has sort of obscured this profound underlying structural weakness.
00:31That's exactly it. Despite that big population number, the central economic reality for Russia right now is, well, they're calling it a devastating personnel famine.
00:41A personnel famine. That's the paradox we really need to get into. How can a country of 144 million people be effectively running out of workers?
00:49Yeah, and the sources we've looked at, they paint this picture of a crisis that's so deep and now so accelerated that it's genuinely threatening the stability of the Russian economy, maybe even the state itself.
00:59And the official economic numbers, they're deceptive too, aren't they?
01:02Totally. By mid-2025, Russia's unemployment rate is reported to be staggeringly low, something like 2.2% or 2.3%.
01:10Which, in almost any other industrial economy, you'd think, wow, that's fantastic. Full employment, booming growth.
01:16Right. Cause for celebration. But here, it's the opposite. That low unemployment rate, it doesn't signal prosperity, it signals severe scarcity.
01:24It means the labor market has just seized up. They've basically run out of people to hire.
01:29Pretty much. Which leads to these critical shortages everywhere. Manufacturing, defense, healthcare, logistics, you name it.
01:38So our mission in this deep dive, then, is to trace the roots of this, well, existential crisis. We need to go back, right? Back to the 90s.
01:46Exactly. We'll start with that originating shockwave, the collapse of the Soviet Union.
01:50Then we'll look at how Russia's specific economic model, the petrostate structure, made its labor market rigid and vulnerable.
01:57And finally, how the war in Ukraine acted as this brutal, compounding accelerator, turning a slow decline into, well, a full-blown emergency.
02:06Yeah. It's much more than just a tight job market. This is a deep demographic and structural crisis.
02:12It could fundamentally limit Russia's ability to, you know, project power, even maintain its own vast infrastructure, govern itself effectively for decades.
02:22Okay. Let's start at the beginning, then. Right. So to understand this famine today, we absolutely have to confront the 1990s, the collapse of the Soviet Union in 91.
02:31It wasn't just political, was it? It was like an economic and societal earthquake.
02:35Oh, completely. Economic apocalypse is almost putting it mildly. The shift from communism to this chaotic, often criminal form of capitalism.
02:44Yeah. It was brutal. GDP just plummeted. How much are we talking? Around 40% between 1991 and 1998. Think about that. It's steeper than the U.S. Great Depression, but crammed into just eight years. Unbelievable speed.
02:55And the social safety net people might have relied on. Gone. Yeah. It just disintegrated.
02:59Privatization often meant asset stripping, not building competitive industries. Workers went unpaid for months sometimes. Unemployment officially hit 14%. But even that number, it doesn't capture the real pain. Mass underemployment. Factories just shutting down.
03:15And then there was the inflation. Hyperinflation. It just vaporized people's life savings. The state treasury was effectively empty. So core services, pensions, public health care, education, they collapsed. The state just couldn't afford to care for its citizens anymore.
03:29That must have created such a profound loss of faith in the future. Exactly. And it was this immediate economic collapse that triggered what our sources call that devastating one-two punch on Russia's demographics. This is what locked in the current workforce shortage decades ago.
03:44Okay. Punch number one. Fertility collapse. Simple as that. When people are terrified about the future, they stop having kids. Russia's fertility rate was 2.0 births per woman in 1989, almost replacement level. 2.1 is what you need.
03:57And where did it go? Crashed. To a record low of 1.16 by 1999. Barely half the replacement rate.
04:04Wow. So in a decade, it halved. The implication of that.
04:07It's huge. The sources say it clearly. An entire generation of children who should have been born simply did not exist. An entire cohort missing.
04:16And you can't just magic those people back.
04:18Exactly. That deficit is non-recoverable. This smaller group, born in the 90s, they're now in their prime reproductive years themselves. So there are far fewer potential parents today.
04:29Even though the rate recovered a bit later?
04:31It did. Yeah. It crept back up to maybe 1.78 in the 2000s and 2010s.
04:36Yeah.
04:36But it's dropped again since. The fundamental damage was done. That demographic shock of the 90s created this permanently thinner base at the bottom of the population pyramid.
04:45Okay. So that's the first punch. Fewer babies. What was the second?
04:48A mortality spike. And this one is arguably even more tragic, more brutal. The sources suggest this collapse in male life expectancy. It was unprecedented in the developed world, unless you're talking about a full-scale war.
05:00How bad did it get?
05:00Male life expectancy was a decent 64 years in 1989. By 1994, just five years later, it had plummeted to 57.6 years.
05:10Over six years lost. In half a decade.
05:13Yes. It's an immense statistical tragedy. And it meant millions of skilled, working-age men were just permanently removed, gone from the labor pool, gone from their families.
05:23What was killing them so suddenly, beyond just the general stress, which must have been immense?
05:27The data points overwhelmingly to two things, social breakdown and alcohol. Cheap, often illicit, alcohol flooded the market just as social structures weakened.
05:38How much are we talking?
05:39By the mid-90s, annual consumption hit an average of 32 pints of pure alcohol per person. That's double the World Health Organization's crisis threshold. This wasn't just, you know, social drinking. This was despair.
05:51Yeah.
05:52And lethal doses.
05:52And the impact wasn't just long-term health damage, like liver failure.
05:56No. No, it was immediate. An explosion in violent crime, horrific accidents, and sudden heart issues, often brought on by binge drinking. There's this chilling statistic from 1995.
06:05Yeah.
06:0675% of homicide suspects arrested that year were detained while drunk. 75%.
06:11Good grief. That paints a picture of utter chaos.
06:14It does. It meant so many young men were lost not just to economic problems, but to premature, often violent deaths.
06:21And with the government broke and public health collapsing, things like heart disease, other chronic conditions.
06:29They just went untreated.
06:30Exactly. The system couldn't cope at all. Mortality rates only really started to come back down, returning to pre-collapse levels well into the 2010s. So that demographic drain lasted nearly 20 years.
06:41So fewer births, more deaths. This combination created that, that haunting term, the Russian cross.
06:48That's right. It appeared on the demographic charts first in 1992. The line for deaths crossed above the line for births. That year, Russia recorded 1.8 million deaths, but only 1.6 million births. The population entered a state of natural decline.
07:03And it wasn't just a temporary blip.
07:04No, not at all. That trend, deaths, permanently exceeding births, it continued for 18 straight years. 18 years.
07:10So by the time Vladimir Putin came to power and started stabilizing things, the demographic damage was already baked in.
07:16Absolutely. The architecture of the future workforce shortage was already set in stone. The country had locked in a labor crisis that was bound to manifest. Well, right about now.
07:27Which leads us straight to the aging population issue that was already a problem before the war. The population pyramid got totally skewed.
07:34Oh, profoundly top heavy. Rostat data confirms it. Between 1990 and 2023, the share of Russians aged 65 and older went from 10 percent up to 16.6 percent. A huge jump.
07:47And at the other end, the kids.
07:48The future workforce children and teens under 16, their share shrank from 24 percent down to just 18.5 percent.
07:55So what's the inevitable economic consequence of that kind of inverted pyramid?
07:59Well, it's a self-feeding crisis, really.
08:01Yeah.
08:01First, you've got fewer young people entering the workforce each year, which inherently limits your production capacity.
08:06Right.
08:06Second, that older, larger group puts this massive, unsustainable burden on the pension system. A smaller and smaller group of working people is paying taxes and contributions to support an ever larger group of retirees.
08:19So even without any external shocks, Russia was heading for a major financial pressure point and a labor crunch.
08:25Guaranteed. Demographic time bomb was armed decades ago. It was just waiting.
08:30Okay. So that structural weakness, that demographic hole was dug back in the 90s. But now we need to look at how Russia's chosen economic path over the last couple of decades. It didn't fix the problem. In fact, it sort of locked the labor market into this state of chronic vulnerability.
08:47Yeah. This is where it gets really interesting. This is the petrostate paradox.
08:50After the absolute chaos of the Yeltsin years, the strategy under Putin seemed pretty straightforward, right? Use the oil and gas money.
08:57Exactly. Leverage Russia's immense natural resources to stabilize state finances, restore order, pay pensions, project power. And, you know, for a while it worked. Those energy revenues became the engine of stability.
09:09But the reliance on it became almost total. We're talking about an economy just fundamentally hooked on volatile commodity prices.
09:16Completely hooked. By the 2010s, energy exports were something like two-thirds of all export revenues. And they provided roughly half the federal budget. Half.
09:24That massive cash flow basically insulated the state, didn't it? It meant they didn't have to do broader economic reforms.
09:31Precisely. It allowed them to pay the pensions, maintain a huge public sector, buy social stability. But it came at a cost, a lack of labor market diversification.
09:41Okay. Help us understand the paradox here. If Russia was swimming in energy wealth, why didn't that translate into lots of good jobs across the economy?
09:48Because oil and gas extraction. They're capital-intensive industries, not labor-intensive ones.
09:54Think about it. Huge investments in machinery, pipelines, complex technology. But relatively few actual workers needed on the ground to run it all.
10:03How few people did it take to generate all that wealth?
10:05The numbers are genuinely shocking. In 2020, the entire oil and gas sector, from drilling to export, employed only about 1.2 million workers.
10:141.2 million out of a workforce of, what, 70-something million?
10:18Yeah, it's barely 1.5% of Russia's entire workforce. Yet that tiny slice generated 20% of GDP and provided 40% of government revenue.
10:26So 98.5% of the workforce was essentially living off the spillover from this tiny, highly automated sector.
10:32Pretty much. The employment wasn't direct in energy. It was indirect, fueled by government spending of those energy profits.
10:40Paying for what? Bureaucrats.
10:42A vast state bureaucracy, yes. Lots of public sector jobs in state-subsidized industries, military spending, pensions.
10:50These jobs offered stability, which was psychologically huge after the 90s, but they were generally low-paying, often inefficient.
10:57And this created what you called labor market rigidity, because the real wealth was trapped in that tiny energy sector.
11:04The other crucial civilian industries got starved. Manufacturing, high-tech, services, retail, they couldn't compete for talent or investment.
11:13They couldn't match the wages.
11:14Not even close.
11:15Why would a top engineer or a sharp manager go work for some struggling manufacturing plant when they could get a much higher salary in the energy sector,
11:23or at least a very stable, if unexciting, public sector job funded by that oil money?
11:28So the civilian sectors just never really developed properly.
11:31They never matured.
11:33They didn't develop the innovation, the competitiveness they needed to sustain the economy if or when oil prices fell or something else went wrong.
11:40And then you layer on top of that structural flaw the sheer geographic challenge Russia faces.
11:45The country is just massive.
11:47Staggeringly large.
11:48And the wealth is concentrated in these incredibly remote, harsh regions, mostly western Siberia, the Far East.
11:54But where does most of the population live?
11:56Thousands of miles away in European Russia, Moscow, St. Petersburg.
12:00Exactly.
12:01Over 70% of the population is clustered there.
12:03So those few high-paying energy jobs that do exist, they're physically inaccessible to most Russians unless they're willing to relocate to somewhere pretty grim and isolated.
12:13What does that distance mean for actually running the country from Moscow?
12:17Huge logistical headaches.
12:19To maintain the centralized control that the petrostate model demands, Moscow has to pour enormous resources.
12:25Right.
12:25Money, equipment, people just into keeping the basic infrastructure working across that vast territory.
12:31And when the labor pool starts shrinking?
12:33Those remote regions are the first to feel the pinch.
12:36Roads need fixing.
12:37Pipelines need maintaining.
12:39Local services need staffing.
12:41But finding workers willing to move to an Arctic outpost, even for good pay, it becomes nearly impossible, especially when wages in the big cities are also relatively high.
12:51So the petrostate structure, it sounds like it created this kind of gilded cage.
12:55Huge revenues, but concentrated in a tiny part of the economy, failing to spur broad growth.
13:02And relying on this centralized bureaucracy that was already straining under the demographic weight before the current crisis hit.
13:08The vulnerability was structural.
13:10It was baked in when the demographic losses from the 90s finally started showing up as serious worker shortages in the 2020s.
13:16Russia just lacked the diverse, dynamic economic sectors that could adapt, innovate, or attract enough labor, domestic or foreign.
13:22It was fundamentally a crisis waiting for a spark.
13:25And that spark inevitably was the full-scale invasion of Ukraine in February 2022.
13:30So if the 90s dug the demographic hole and the petrostate model stopped it from being filled, the war became this brutal process that just actively started consuming what was left of the labor pool.
13:42Consuming it from three directions at once.
13:44That's why we're calling it the triple drain.
13:46It turned a chronic, decades-long problem into an acute existential emergency almost overnight.
13:52And the economy was already stretched thin before the invasion, right?
13:55Labor was already tight.
13:56Absolutely.
13:57It was running near full capacity with severe labor tightness already reported in many sectors.
14:01So every single person removed from the workforce after February 2022 had an immediate magnified impact.
14:08Okay, let's break down the drains.
14:09Drain number one, military mobilization and manpower.
14:13Right.
14:14The initial invasion force was around 190,000 professional soldiers.
14:19But sustaining that kind of high-intensity warfare, especially with heavy casualties, meant they needed more bodies.
14:25Fast.
14:25Which led to the mobilization in September 2022.
14:28The partial mobilization, yes.
14:31Officially, they called up 300,000 reservists.
14:34But the real impact on the labor force was much bigger.
14:37How much bigger?
14:38Well, the sources suggest that by the end of 2022 alone, you're looking at an estimated 490,000 men pulled out of the civilian economy.
14:46That includes the formal mobilization, plus new contract soldiers signing up, plus those in the initial invasion force.
14:53Nearly half a million men in less than a year.
14:56And the critical thing here, the sort of circular damage, is where these men were pulled from.
15:01Oh, it was a catastrophic self-inflicted wound, particularly for the war effort itself.
15:06Many of the mobilized men were skilled workers already employed in key industries.
15:11Like defense manufacturing.
15:12Exactly.
15:13Defense plants, complex logistics, specialized engineering roles.
15:17So just as the state was ordering these factories to ramp up production quotas to supply the army,
15:22they were simultaneously losing their most skilled, most experienced workers to the army.
15:27Creating instant bottlenecks.
15:28You can't just train a specialized machinist overnight.
15:31Not a chance.
15:31It immediately hit production quality and output.
15:34Just madness, really.
15:35Okay, that's drain one.
15:37What's drain two?
15:38Drain two.
15:39The exodus of the skilled.
15:41The brain drain.
15:42The threat of mobilization, especially after that September announcement,
15:45triggered this mass flight out of Russia.
15:48Unprecedented in modern time.
15:49How many people are we talking about leaving?
15:51The conservative estimates put it between 700,000 and 900,000 Russians fleeing just in 2022.
15:58Some estimates are closer to a million.
16:00A million people.
16:00Where did they go?
16:01Mostly to former Soviet states.
16:04Initially, Kazakhstan, Armenia, Georgia were big ones.
16:07Also Turkey, Serbia, Dubai.
16:10Anywhere they could get to quickly to escape the draft and for some political persecution.
16:15And what's really devastating for Russia's future here is the type of people who left.
16:19It wasn't just a random sample.
16:21Not even close.
16:22The data is stark.
16:23Get this.
16:2481% of those who fled right after the mobilization had a university degree.
16:2881%.
16:28Compared to what in the general population?
16:31Only about 27% of Russians overall have a university degree.
16:34So hugely skewed towards the highly educated.
16:36And they were young too.
16:38Yeah.
16:38Average age was 32, right?
16:40In their prime productivity years.
16:43Prime family forming years.
16:45Compare that to the national average age of 46.
16:47Russia lost its future in many ways.
16:50That's a demographic gut punch.
16:52Which sectors were hit hardest by this brain drain?
16:55The IT sector was absolutely decimated.
16:57Sources estimate between 100,000 and 170,000 IT workers left.
17:02That could be up to 20% of their entire IT workforce.
17:05Gone.
17:0620%.
17:07That's not just losing people who build websites.
17:09That's critical infrastructure stuff, right?
17:11Absolutely.
17:12These are the people essential for cybersecurity, for industrial automation, for maintaining
17:16the complex software systems that run everything from banking to the power grid to logistics.
17:21So if 20% of your IT maintenance crew suddenly relocates to Yerevan or Dubai.
17:27Your internal digital infrastructure becomes incredibly vulnerable.
17:30You're relying on older systems, less secure systems.
17:33It cripples any chance of modernizing the economy, of moving away from just being a petrostate.
17:38It's a massive long-term blow.
17:39Okay.
17:39Mobilization, exodus.
17:41What's drain three?
17:42Drain three.
17:43Casualties and the state burden.
17:45This is the most tragic, obviously.
17:47The permanent removal of working age people from the equation.
17:50The human cost must be staggering by now.
17:53It continues to climb dramatically.
17:55By mid-2025, total rushing casualties, and this includes the dead and the severely wounded
18:00who likely won't return to the workforce, are believed to have surpassed one million.
18:05One million.
18:07And the number killed.
18:08Conservative estimates put the number of deaths somewhere between 200,000 to 300,000.
18:13These are overwhelmingly men, mostly young men, in their prime working and family starting
18:18years.
18:20Their loss is irreversible for the economy and society.
18:24And the economic loss isn't just the lost productivity of those killed, right?
18:27The wounded create a whole other problem.
18:29It's a huge hidden cost.
18:31You have potentially hundreds of thousands of severely wounded soldiers who need immediate,
18:35expensive, and long-term state support.
18:37We're talking years of therapy, rehabilitation, prosthetic limbs, and crucially, early state pensions.
18:43Which puts even more pressure on the already creaking social budget and the shrinking pool
18:47of active workers paying into the system.
18:50Exactly.
18:50It drastically accelerates that pension crisis we talked about from the 90s demographic
18:54hole.
18:55It's another vicious cycle.
18:56So this triple drain mobilization, removing workers, the skilled fleeing, and casualties
19:00permanently deleting others, it all comes together in today's labor figures.
19:04That's why that 2.2% unemployment rate isn't good news.
19:08It's a sign of absolute exhaustion.
19:11The system has run out of slack.
19:13Regions across the country are reporting critical shortages.
19:15Like how bad?
19:16We've seen reports from major industrial regions citing nine job vacancies for every single
19:21registered unemployed person.
19:23Nine vacancies per person.
19:25Businesses literally cannot find people.
19:27They can't expand.
19:28They can't modernize.
19:29Sometimes they can't even maintain current operations.
19:32And the long-term damage, the impact on future population growth?
19:35Yeah.
19:35It's already showing up.
19:37Terrifyingly fast.
19:38The birth rate data for 2024 is just appalling.
19:41Only 1.22 million babies born in Russia.
19:44How does that compare historically?
19:45It's barely above the absolute record low.
19:48Seen back in 1999, 1.21 million during the very worst of the post-Soviet collapse.
19:52So in just three years, the war has basically wiped out two decades of slow, painful demographic
19:59stabilization efforts.
20:01Pretty much.
20:02It's thrown the country's reproductive health right back to the chaos and fear of the 90s.
20:06The long-term consequences are just immense.
20:09Okay, so the labor pool is vanishing.
20:11The pressure is immense.
20:12How has the state reacted?
20:14It seems like they've essentially turned the entire economy towards the war effort.
20:18That's exactly what's happened.
20:19They've weaponized the economy, but it's consuming what's left of the civilian sector.
20:24The first big pressure point is just raw state spending.
20:27On defense.
20:28Overwhelmingly.
20:28By 2025, defense and security spending had just exploded.
20:33It's over 40% of the entire federal budget now, constituting almost 8% of GDP.
20:38That's a massive reallocation of resources.
20:41Russia is fully on a wartime economic footing.
20:43And that level of spending must create this brutal competition for the few workers left.
20:48A military bidding war for labor.
20:50Precisely.
20:51The military desperately need soldiers for the front lines.
20:54The defense factories desperately need mechanics, engineers, technicians to build the equipment.
20:59They're fighting over the same shrinking group of working-age men.
21:03And the state can't just order another mass mobilization easily, politically speaking.
21:07Right.
21:07So instead, they've resorted to throwing money at the problem,
21:11unprecedented financial incentives for men to sign military contracts.
21:15And these incentives, they just completely distort the civilian job market, don't they?
21:20Oh, absolutely.
21:20They create this staggering economic pull.
21:23Contract soldiers can earn three, four, even five times the average Russian wage.
21:28Five times.
21:29Plus, the sign-up bonuses are enormous.
21:32Up to 1.9 million rubles.
21:33That's roughly $22,000 U.S. just for signing a 12-month contract.
21:38$22,000 up front.
21:40For many people outside Moscow or St. Petersburg, that must be.
21:43Years of salary.
21:44For many Russians, that bonus represents two, maybe even three years' worth of their normal income.
21:49Paid immediately, tax-free.
21:50So if you're working in a struggling civilian factory, wages are stagnant because of sanctions and inflation.
21:57And the army offers you that kind of money.
22:00It's an almost impossible offer to refuse for many.
22:03The military becomes the highest-paying, most reliable employer around.
22:07The civilian sector simply cannot compete.
22:10Which just strips the civilian economy bare.
22:12Exactly.
22:13Manufacturing, construction, retail, services.
22:16They're left with older workers, women, the least skilled.
22:20It just accelerates the collapse of the non-military industrial base.
22:23And this collapse is made even worse by what the sources call the paradox of state control.
22:29The state is demanding more from defense contractors, but actually making it harder for them financially.
22:34It's perverse.
22:35The state dictates the prices for military orders.
22:37And often those prices are set too low.
22:39They don't cover the contractor's full operational costs, let alone allow for profit or investment.
22:45And they can't refuse the orders.
22:46Not anymore.
22:47New laws make it a criminal offense for contractors to refuse a military order or fail to deliver on time.
22:53You could go to prison.
22:53So, business owners are trapped.
22:56Produce for the war at a loss or risk jail.
22:59What does that do long term?
23:00It destroys the industrial base from within.
23:03Factory owners are forced to cut corners, use subpar materials, cannibalize existing machinery, defer vital maintenance, anything to meet the quota and stay out of trouble.
23:13So, they can't invest in the future, like automation, which they desperately need because of the labor shortage.
23:18No chance.
23:19All their capital, all their focus is tied up in just surviving these low margin state mandated orders.
23:26So, the industrial base might be churning out tanks today, but it's essentially rotting internally.
23:31Which all feeds into this vicious cycle of decline you mentioned.
23:34Right.
23:35Less civilian production means lower tax revenues for the state.
23:39The state needs money for the military.
23:40So, it cuts civilian spending, even further health care, infrastructure, social programs.
23:45Making life harder for ordinary Russians, especially outside the big cities.
23:49Exactly.
23:50Inflation is high.
23:51Interest rates are brutal.
23:52People's prospects diminish, which perversely pushes them back towards the military as the only reliable source of a decent income.
24:02The whole economy is eating its own future to feed the war machine today.
24:06Okay.
24:06So, internal solutions are failing.
24:08What about the traditional safety valve immigration?
24:11Russia historically relied heavily on workers from Central Asia.
24:14They did.
24:14Before 2022, there were about 5 million Central Asian migrants in Russia, mostly from Tajikistan, Uzbekistan, Kyrgyzstan.
24:21They were absolutely essential for low-skilled jobs, construction, agriculture, cleaning, delivery services.
24:27It was a system that warped, more or less, even if it was often exploitative.
24:31And economically vital for the migrants' home countries, too, right?
24:34The money they sent back.
24:35Hugely important.
24:36Remittances often made up a massive chunk of their national economies.
24:40Like, 50% of Tajikistan's entire GDP came from money sent home by workers in Russia.
24:45But the war just completely broke that system.
24:47Why did it unravel so fast?
24:48Three main reasons, really.
24:50First, simple economics.
24:53The ruble tanked after the invasion and sanctions hit.
24:56Wages that looked okay in 2021 suddenly weren't worth nearly as much in dollars or euros by 2023 or 2024.
25:04The real value of the money they could send home was slashed.
25:07Okay, money's less attractive.
25:09What was the second factor?
25:10Safety.
25:11Personal safety.
25:12This became huge after 2022.
25:15The threat of mobilization or being pressured or tricked into signing military contracts became very real.
25:20Even though technically they weren't supposed to be drafted.
25:23Technically, no.
25:23But reports flooded Central Asian communities about police harassment,
25:27random document checks turning into recruitment pitches,
25:30threats of deportation unless they signed up.
25:32Russia just stopped feeling safe, especially for young men.
25:35Parents became afraid to send their sons.
25:37And the third reason it failed.
25:39New opportunities opened up elsewhere.
25:40The world didn't stand still.
25:42Global competition for labor actually increased.
25:45Where were they going instead?
25:46Kazakhstan saw a boom as Western companies relocated there from Russia, creating jobs.
25:52The Gulf states, Saudi Arabia, UAE, launched massive construction projects
25:56and actively recruited Central Asian workers, often offering better conditions.
26:01Turkey, South Korea also expanded their labor programs.
26:04Migrants suddenly had other safer, often better paying options.
26:08The risk of going to Russia just wasn't worth it anymore.
26:10And we see this in the migration numbers.
26:13A real collapse.
26:14Yeah, the data is striking.
26:16Kazakhstan reported a 20% drop in migrants heading to Russia in 2024.
26:20More recently, data from March 2025 showed a staggering 75% year-over-year drop in new labor migrants entering Russia.
26:2875%.
26:29So the main source of low-skilled labor is just drying up precisely when Russia needs construction workers and logistics staff more than ever because of the war effort and the internal shortages.
26:38Exactly.
26:39But here's the other thing.
26:40Even if migrants were still pouring in, they couldn't solve Russia's core problem.
26:43There are these fundamental structural barriers.
26:45Okay.
26:46Barrier number one.
26:47They're the wrong workers for the biggest gaps.
26:50Russia is desperate for the highly skilled people who fled and drained too.
26:54The engineers, the IT specialists, the experienced technicians.
26:58Central Asian migrants typically fill low-skilled roles.
27:01You simply cannot replace a lost software architect with a construction worker.
27:06The skills don't match the need.
27:07Makes sense.
27:08Barrier number two.
27:09Russia's own deep-seated societal issue.
27:12Pervasive xenophobia and the failure of integration.
27:16It's not a welcoming environment.
27:17The sources are really clear on this.
27:19Central Asian migrants face constant systemic discrimination in finding housing, opening bank accounts, dealing with bureaucracy, police profiling, document checks, harassment.
27:30It's routine.
27:31It's aggressive.
27:32Which discourages them from staying long-term.
27:34Absolutely.
27:34It makes permanent settlement, bringing families over, putting down roots.
27:38It makes it incredibly difficult and unpleasant.
27:40So they remain a temporary transient labor force, not a solution to the long-term population decline.
27:45And barrier number three goes back to geography again.
27:47Yep.
27:47The geographic mismatch strikes again.
27:49Migrants naturally cluster where the most jobs are, which means the big cities, Moscow, St. Petersburg, mostly in the service sector.
27:58But the worst labor shortages, the critical industrial ones.
28:01They're out in the remote, harsh regions.
28:04Siberian oil fields, Arctic ports, far eastern military bases, and factories.
28:10These are precisely the places migrants tend to avoid if they can.
28:14So the most essential jobs, the ones underpinning the resource extraction and military maintenance, they remain unfilled.
28:20So the military bidding war isn't sustainable.
28:23Immigration is failing.
28:24What else has the government tried?
28:26They tried to legislate more babies, didn't they?
28:28Ah, yes, the pronatal policies, with the birth rate currently scraping the bottom globally around 8.4 births per 1,000 people.
28:35They passed a law, right, banning, what was it, child-free propaganda?
28:39Pretty much.
28:40The Duma passed legislation banning pernicious propaganda for a child-free way of life.
28:45The idea is to impose fines, maybe even jail time, for promoting a child-free existence online or anywhere else.
28:50The official line being that it's decadent Western ideas causing the low birth rate.
28:54That's the narrative, that it's somehow influencing young women against their natural, patriotic duty to have children.
29:01Okay, but let's apply some critical thinking here.
29:03Does banning a few social media groups about, I don't know, child-free travel actually stand a chance against the brutal economic reality Russians are facing?
29:13It seems, well, absurd.
29:15The legislative effort looks particularly stark when you put it next to the economic picture.
29:20While the government is trying to outlaw child-free thoughts, the Bank of Russia has had to hike interest rates up to 21%.
29:2721%.
29:28To fight inflation, which means mortgages.
29:32Mortgages are likely over 20%, maybe closer to 25% in reality for most people.
29:37Think about buying a family apartment with that kind of rate.
29:40It's impossible for most young couples.
29:41Exactly.
29:42When young people face that reality savings eroded by inflation, huge job uncertainty because of the war, housing costs driven out of reach by insane interest rates, they're not going to choose to have children, regardless of same propaganda or bans on websites.
29:56The basic confidence in the future just isn't there.
29:58It's absent.
29:59As one analyst put it, you can't legislate fertility when the economic climate actively punishes family formation.
30:06This policy is symbolic at best, utterly doomed to fail at actually boosting births.
30:12It just underlines the state's inability or unwillingness to tackle the real structural causes of the crisis.
30:19Which brings us, finally, to this, the stunning ultimate irony.
30:24The sources we looked at strongly suggest that a key motivation, maybe even a primary one, behind the invasion of Ukraine in the first place, was actually a desperate, cynical attempt to fix Russia's own demographic problem, to acquire people.
30:37It sounds grim, but from the Kremlin's strategic perspective, pre-war Ukraine looked like the perfect solution to their demographic whole.
30:44How so?
30:44Well, before 2022, Ukraine had a population of, say, 41 to 45 million people.
30:50Crucially, it was younger on average than Russia's population, had a slightly higher birth rate back then, and possessed this large pool of highly educated technical workers, engineers, people skilled in industries Russia needed.
31:01And critically, the cultural and linguistic links were very strong.
31:04Exactly.
31:06Ukrainians represented, as one source put it, the most compatible source of immigrant labor Russia could ever hope for.
31:12If Russia could have successfully absorbed Ukraine, or even large parts of it.
31:17It could have meant millions of new, relatively young, skilled workers pouring into the Russian system.
31:24Potentially stabilizing Russia's economy and demographics for decades.
31:28It would have been a massive demographic windfall.
31:30And there was evidence they planned for this.
31:32It wasn't just about territory.
31:34There's strong circumstantial evidence.
31:35Think about how quickly they started handing out Russian passports in occupied areas like the Donbass, even before 2022.
31:43And the early administrative plan seemed focused on integrating Ukrainian regions directly into Russia's system, absorbing the population.
31:50They clearly saw the people, not just the land, as a key strategic prize to offset their own decades of decline.
31:56But the war achieved the exact opposite, a complete strategic backfire on the demographic front.
32:01Total backfire.
32:03Instead of gaining people, the war triggered a massive demographic catastrophe, arguably worse in Ukraine than in Russia, and strengthened Ukrainian national identity in a way that makes integration impossible.
32:15What are the population numbers for Ukraine now?
32:17Pre-war, estimates were around 43 million, give or take, today.
32:22Estimates range wildly, but generally fall between 31 and 35 million currently living within Ukraine's controlled borders.
32:30That's a potential loss of over 10 million people in just three years, mostly through displacement.
32:35Utterly devastating.
32:36And where did the displaced people go, the refugees?
32:39Over 6 million Ukrainians registered as refugees, mainly in Europe.
32:43Poland, Germany, Czech Republic took huge numbers.
32:46And these aren't temporary camps for the most part.
32:48They're settling in.
32:49They are.
32:50Families are integrated.
32:51Kids are in local schools.
32:52Adults are finding jobs, building new lives.
32:55They're establishing roots.
32:56Which means, for Russia's strategic calculation, they're gone.
33:01Permanently lost.
33:02Every single one of those individuals, those families, represents a permanent loss that Russia can now never claim, no matter how the war ends territorially.
33:11They sought to gain millions and instead ensured millions were pushed permanently out of reach.
33:17And tragically, the war has also wrecked Ukraine's internal demographics, too, mirroring Russia's own losses.
33:22Absolutely.
33:23Huge numbers of Ukrainian men killed or severely wounded, removed from the workforce and family formation.
33:29The demographic devastation has been mutual in that horrific sense.
33:33But the final nail in the coffin for Russia's hope of gaining a vibrant population is what's happened to the birth rate inside Ukraine now.
33:41It's plummeted even further.
33:42Ukraine's fertility rate was already low before the war, maybe 1.2 now.
33:46It's estimated to have dropped by 30, maybe 40 percent in some regions.
33:50It's fallen below 1.0 nationally, record lows.
33:53So even if Russia somehow conquered all of Ukraine tomorrow, the demographic prize they invaded for is gone.
33:59It's gone.
34:01The future population structure of Ukraine is now destined to be far smaller, older, and deeply scarred by this conflict.
34:08The vibrant workforce Russia perhaps hoped to annex simply doesn't exist in the same way anymore.
34:14This whole narrative, it just perfectly illustrates that phrase, a self-perpetuating disaster.
34:20It really does.
34:21Russia starts a war, partly driven by a need for more people.
34:25But the act of fighting kills its own young men, drives away its existing skilled workers, and demolishes the population structure of the very nation it wanted to absorb.
34:34Every action taken to solve the demographic problem through force has only made the problem exponentially worse for everyone involved.
34:40It's a profound strategic failure, layered on top of the initial demographic weaknesses.
34:45The attempt to gain demographic strength has only accelerated Russia's own decline, locking it into a much deeper crisis that will take generations to maybe possibly reverse, if it even can be reversed.
34:56Hashtag tag outro.
34:57So wrapping this up, this deep dive really shows that Russia's personnel famine.
35:00It isn't some temporary blip in the labor market.
35:03It's structural, it's long term, and it's compounding.
35:05Yeah, it was seeded way back by that mortality spike and fertility collapse in the 90s.
35:11Then it was sort of hardened into place by the rigidity of the petrostate economy.
35:16And now it's been brutally accelerated by the triple demographic drain of this war.
35:20And the usual fixes for demographic problems, they just seem completely unavailable or ineffective for Russia right now.
35:26Right.
35:27You can't just magically fix a fertility rate of 1.5 overnight.
35:31Having more babies takes decades to impact the workforce.
35:34And besides, the current economic reality of those 20% mortgage rates makes starting a family incredibly difficult, almost prohibitive for many.
35:42And immigration.
35:43That's failed too.
35:44The combination of the falling ruble, the very real safety threats from nobilization and coercion and just the pervasive xenophobia, it's dried up that vital flow of labor from Central Asia.
35:55So the last resort might be automation technology.
35:57But that needs huge capital investment.
36:00It needs innovation.
36:00And critically, it needs the highly skilled technical workforce, the engineers, the IT specialists that Russia is rapidly losing through sanctions, restricting access to tech and through the ongoing brain drain.
36:14They lack the money and the people to automate their way out of this.
36:18So Russia still looks powerful on paper, doesn't it?
36:21It has the nuclear arsenal, the vast resources.
36:23It does.
36:24But its actual capacity to convert those assets into real political and economic influence, especially relative to faster growing economies elsewhere, that capacity is diminishing rapidly as its productive workforce shrinks year after year.
36:38And if we connect this whole crisis to the bigger picture, what's the final thought?
36:42The worker shortage makes it harder and harder for Moscow to just maintain the basics across that enormous territory.
36:48That's the really critical point, I think.
36:49Imagine the sheer cost and manpower needed to keep the pipelines flowing, the roads passable in winter, the hospitals staffed, the lights on across 11 time zones, all with a shrinking, aging workforce.
37:01History has some ominous precedents there.
37:03It does.
37:04We saw the Soviet Union collapse, driven largely by internal economic and structural weaknesses, not just external pressure.
37:11When a central government loses the ability to effectively manage its vast territory and provide basic stability because its core population is shrinking and its economy is faltering.
37:22It creates openings.
37:23It creates the conditions for regions to start looking after themselves, especially those far-flung resource regions that might feel Moscow is draining them without providing enough in return.
37:33It could push them towards demanding greater autonomy, maybe even challenging central control down the line if the center continues to weaken.
37:41So the Russian demographic time bomb, it wasn't just ticking.
37:44It feels like it exploded in 2022.
37:47And the economic and political aftershocks are likely to shape Russia and reverberate across the global stage for the rest of this decade and probably much longer.
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