July 2, 2025: Russia has accelerating problems with labor shortages and millions of Russians working in the untaxed and unregulated informal economy. There are multiple reasons for these problems. Since the 1990s the population has been shrinking because of declining birth rates. Since the 2022 invasion of Ukraine, foreign workers have stopped entering Russia or left because so many of them were coerced into the Russian army to die in Ukraine. All this led to a crippling labor shortage, which is currently nearly 19 percent.

Some useful solutions are being considered. One is to make it easier for those working in the unofficial shadow economy to join the legal workforce. Another is to enforce laws mandating equal pay for women doing the same jobs as men. This will encourage many childless wives who remain as homemakers to return to work. These same programs will encourage students to take part time jobs.

Another proposal, which is more difficult to implement, is eliminating the lack of well-paid jobs for non-Slav Russians. One popular solution is to equalize pay rates for everyone. There are at least 15 million Russians who could be added to the workforce if these measures are successful. Another popular measure would be ending the war in Ukraine, but the government will not touch that.

For centuries Russia was considered a threat to its neighbors by virtue of its larger population. But since the Soviet Union fell apart in 1991 and half the population broke away to form 14 new nations, the remaining Russian population has been in decline. Twenty years after the Soviet Union collapsed, the Russian population implosion is getting worse. While in the 1990s the population was shrinking at a rate of 0.1 percent a year, in the last decade that has increased to 0.2 percent a year. This is because the non-Slav Russians are having fewer children, just as the Slavs have been doing or, rather, not doing for decades. The Russian population has declined three percent since 1989, from 147 to 142.9 million. The proportion of the population that is ethnic Slav Russian has declined from 81.5 percent to 77 percent in that same period.

The rapidly aging Russian population is not only shrinking but is not fit for any major economic or military efforts. During the last decade it was discovered that some 60 percent of Russians are elderly, children, or disabled. Out of 20 million males of working age, one million are in prison, a million in the armed forces including paramilitaries, five million are unemployed or unemployable due to poor education, health, or attitude, four million are chronic alcoholics, and a million are drug addicts.

Thus there is something of a labor shortage, with plenty of jobs for women and immigrants. The birth rate is below replacement level and a declining population means more immigrants just to keep things going. Improving medical care and health habits, especially treating alcoholism and drug use, is a government priority, in order to raise the lifespan of Russian males. That has had some success, and in urban areas you see more Russians out running and going to the many newly built private gyms. But these improvements are not happening quickly enough to reverse the population decline.

If this trend is not reversed, Russia will continue to have a smaller and less Russian population.