Russia’s War Boom Masks an Economic Implosion
Record-low unemployment is the result of millions of missing workers.

Earlier this year, the Alabuga industrial complex in Russia’s Tatarstan region released a series of job recruitment ads aimed at Russian teenagers. The company promised the children full-time wages significantly above the national average to assemble Geran attack drones—Russian clones of Iranian Shaheds that have been terrorizing Ukrainian civilians almost nightly for the past four years. The recruitment campaign was a simultaneous admission of two things: that Alabuga is not the vocational training institution it claimed to be in earlier ads and how severe Russia’s worker shortage has become. Competition with the military for labor has become severe enough that recruiting children into weapons manufacturing is now done openly rather than hidden and denied.
Alabuga has attracted international attention before. Its recruitment practices have been described by investigators and Ukrainian intelligence services as bordering on human trafficking: Young women from across Africa, Asia, and Latin America were lured with promises of study programs or civilian factory work, only to be assigned to drone assembly lines under strict curfews and oppressive conditions. Alabuga is not an anomaly but just the visible edge of a systemic crisis. Russian President Vladimir Putin presents record-low unemployment—the official rate is currently 2.1 percent—as proof of a dynamic war economy. The reality concealed by the ultra-low jobless rate is that Russia’s manufacturing sector was short nearly 2 million workers in 2025, according to the Russian labor and trade ministry, with the overall deficit of workers officially projected to reach more than 10 million by the end of the decade.
Earlier this year, the Alabuga industrial complex in Russia’s Tatarstan region released a series of job recruitment ads aimed at Russian teenagers. The company promised the children full-time wages significantly above the national average to assemble Geran attack drones—Russian clones of Iranian Shaheds that have been terrorizing Ukrainian civilians almost nightly for the past four years. The recruitment campaign was a simultaneous admission of two things: that Alabuga is not the vocational training institution it claimed to be in earlier ads and how severe Russia’s worker shortage has become. Competition with the military for labor has become severe enough that recruiting children into weapons manufacturing is now done openly rather than hidden and denied.
Alabuga has attracted international attention before. Its recruitment practices have been described by investigators and Ukrainian intelligence services as bordering on human trafficking: Young women from across Africa, Asia, and Latin America were lured with promises of study programs or civilian factory work, only to be assigned to drone assembly lines under strict curfews and oppressive conditions. Alabuga is not an anomaly but just the visible edge of a systemic crisis. Russian President Vladimir Putin presents record-low unemployment—the official rate is currently 2.1 percent—as proof of a dynamic war economy. The reality concealed by the ultra-low jobless rate is that Russia’s manufacturing sector was short nearly 2 million workers in 2025, according to the Russian labor and trade ministry, with the overall deficit of workers officially projected to reach more than 10 million by the end of the decade.
Russia’s military industry—also acutely short of skilled workers despite being prioritized by the Kremlin—does not just consume the available workforce but has pushed wages beyond what civilian employers can match. Some factories producing weapons receive lavish state subsidies and the right to offer draft deferments to recruits as a non-monetary incentive; a welder who takes a job at Kalashnikov is not going to be building a clinic, but he also cannot be mobilized. Farms, civilian manufacturing, infrastructure companies, and other non-military but critical parts of the economy have no equivalent offer. On top of that, state-owned employers are actively encouraged to cannibalize their own workforce in order to satisfy the military’s hunger for more bodies to send into useless assaults at the front. Russia’s agriculture sector alone is losing an estimated 150,000 employees each year due to old age, according to Russia’s minister of agriculture, but the widening wage gap between military and civilian industries is also adding to the crisis, In the Volga and Ural regions, where arms manufacturing is concentrated, wage inflation has run at 30 percent to 60 percent since 2022, said Russia’s minister of labor and industry. The result is a bifurcated economy: a defense sector running three shifts and still understaffed; and a civilian economy quietly contracting in the sectors that feed, move, and maintain the country while sustaining the war.
While much exacerbated by the invasion, the labor crisis predates it. The Kremlin’s botched COVID response alone cost Russia an estimated 1 million excess deaths. The continuing demographic collapse is so severe that in 2025, the national statistics office, Rosstat, stopped releasing monthly birth statistics. It’s hard to see this as anything but an attempt to prevent the kind of straightforward arithmetic that would allow anyone to calculate, in real time, how many more Russians are dying than being born—and how many surplus deaths are attributable to the war. The suppression of demographic data goes hand in hand with the suppression of casualty figures. Both are attempts to manage a reality that the numbers, if allowed to become public, would make undeniable.
The war itself has compounded the damage in ways that no recruitment drive can easily reverse: hundreds of thousands of working-age men killed or permanently disabled at the front; somewhere between 500,000 and a million more—disproportionately educated and economically active—who left Russia after the start of the war and have not come back. The civilian economy now competes for whoever is left against a defense sector offering wages three to four times the regional average, not to mention a military that offers signing bonuses worth several years’ income in the poorer oblasts.
While promoting a rabidly Russian-supremacist ideology to justify the invasion and running a domestic anti-migration campaign, Russia is now forced to import even more foreign workers. But the once reliable pool of migrants has been running dry, not least due to Russia’s own actions. State-controlled media spent years blaming all crime and other social ills on migrants, a campaign that culminated in the crackdowns of 2024, when thousands of Uzbek and Tajik workers were detained, harassed, and deported in a wave of xenophobic enforcement. Migration from Central Asia, which had provided Russia with a large, cheap, often precarious workforce for decades, has collapsed: Workers who were once willing to absorb poor conditions and irregular pay now have alternatives in the Gulf states and Southeast Asia. Central Asian governments have watched too many of their citizens get forcibly recruited into the Russian military and die in Ukraine to be enthusiastic about encouraging the flow. Russia’s nativist turn didn’t just alienate its neighbors, it destroyed its own local labor supply chain.
With the twin pressures of dwindling domestic recruitment into the army and factories, Russia is forced to look for both soldiers and workers abroad. According to Ukrainian prisoner-of-war data, more than 27,000 foreign nationals were fighting for Russia in March, up from 18,000 in November. On the civilian side, the number of work permits issued to Indian nationals alone rose from some 5,000 in 2021 to more than 10 times that number in 2025, according to Russian interior ministry data cited by Bloomberg. Putin’s December visit to New Delhi was partly a labor recruitment summit: Officials signed an agreement to streamline temporary migration procedures, and Russian agencies have since opened training centers in Chennai to prepare candidates before deployment. Russia is also running bilateral labor agreements with Sri Lanka and opening recruitment offices in Myanmar.
The military and civilian pipelines, however, are fishing in the same waters using the same methods and networks from Nairobi to Hyderabad. A young man in Kathmandu watching a YouTube channel that promises construction or security guard work has no reliable way to know whether the job at the end of the process is at a building site in Qatar, at a missile assembly line in Russia, or on a battlefield in Ukraine. And the Russian military’s practice of sending foreigners straight to the front line after signing a contract in a language they don’t understand, with little or no training, is poisoning labor recruitment despite the significantly larger demand for workers than soldiers. Of the thousands of Indian nationals who traveled to Russia for work, only a few hundred ended up in active military service, according to India’s Ministry of External Affairs. But those cases have generated enough diplomatic friction to threaten the entire labor relationship, with Prime Minister Narendra Modi personally complaining to Putin about the fate of Indians still trapped against their will in the Russian army. Nepal has gone further, banning its citizens from traveling to Russia for work entirely after dozens of Nepalis were killed in Ukraine. In January, Russia quietly issued a stop list to military recruiters that is supposed to halt enlistment of nationals from India, Kenya, Nepal, and dozens of other countries that Russia looks to as labor donors.
What makes the current shortage structurally irreversible, rather than merely severe, is the demographic layer beneath the war’s (and the pandemic’s) immediate damage. The workers now missing from Russia’s factory floors are not only the mobilized and emigrated. They are also the children never born during the 1990s collapse, when Russia’s birthrate fell by nearly half. That cohort is now in its late 20s and early 30s—precisely the age group that should be filling industrial and skilled-trade positions. Industry surveys published in the Russian trade press put the average age of a lathe operator at a Russian industrial enterprise above 45. Defense plants are running training programs that take a minimum of two years to produce a skilled specialist, but the war’s demand for bodies does not pause for vocational education. The demographic hole and the damage done to Russia itself by its war of choice are not sequential crises to be addressed one after the other. They are the same crisis, arriving simultaneously. The invasion that Putin insists on waging despite its obvious self-destructive nature is the reason Russia cannot address either.
Alexey Kovalev is an independent journalist and former investigations editor at Meduza who left Russia in 2022. X: @Alexey__Kovalev
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