The idea is not new. These bans first appeared in 2014 and were intended to solve major problems in regions. These restrictions are often imposed to redistribute resources, eliminate local imbalances in unemployment and reduce social tension. Therefore, bans often affect socially significant areas.
Bans change frequently and the legal framework for the labour migration market is imperfect. Immigrant labour is in high demand in most regions of the country; in the context of the demographic crisis, the Russian economy will need two million additional workers by 2030. The greatest need for foreign workers is observed in construction, agriculture and the service sector. To stabilise the situation on the labour market, it was necessary to attract from 390,000 to 1.1 million migrants a year. Today, bans have already been introduced in the Kurgan region: migrants in the region cannot find employment in the production of baby food and dietary foods, in Kaliningrad – in the production of bakery products, in the Perm Territory – in the oil production industry.
According to a survey by the ET Gaidar Institute for Economic Policy for 2024, the staff shortage at Russian companies continues to increase, with 47 percent of managers reporting a shortage of employees. Attracting qualified personnel to the country can be a successful solution to this problem; it is important that the process of attraction is accompanied by training and preparing migrant workers for work in production. At the same time, domestic job seekers are in no hurry to replace labor migrants: for Russian citizens, working conditions in low-paid positions in production are often unacceptable.
Migrant workers, on the one hand, are “investors” who invest their labor in Russian society, and on the other hand, they can act as “investment objects,” since by investing in their education, Russia can have a unique opportunity to acquire highly qualified specialists. In addition, migrants consume goods and services in the region in which they work, which has a positive impact on the regional economy. They spend part of the money they earn on food, clothing, and other goods and services in the regions where they earn money, helping to develop retail trade and the service sector there.
The legal framework of the labour migration market is imperfect
Migrants (or their employers) contribute taxes and fees to the regional budget, which has a positive impact on the economy: the revenue can be used to develop infrastructure, transport and the healthcare system in the region. Moscow migrants alone transferred about 32 billion rubles to the capital’s budget in 2022 – this is a record amount for the period of existence of labor patents, it is 45 percent higher than contributions for 2021. These tax revenues can be used to finance government programs, infrastructure and social services.
A prolonged ban on migrant workers in industry could negatively impact the industry’s economic performance amid growing demand for quality labor for industry and manufacturing. 85 percent of Russian entrepreneurs believe that staff shortages will remain a key problem in 2024. Large companies, including industrial ones, are experiencing particularly severe shortages.
If companies are forced to operate with fewer employees, this will slow down production processes and reduce output. To attract and retain workers, companies may be forced to increase wages and offer additional benefits. This will lead to increased production costs and may affect the prices of final products.
Moreover, industries with a chronic shortage of personnel have little investment appeal. It is important to find new ways to attract line personnel: specialized digital platforms and agencies that can qualitatively select migrant workers and provide them with legalization and legal support while working at the company. Due to the shortage of labor, it will be difficult for the industry to maintain the required pace of production. In the current situation, 47 percent of companies entered the wage race; by the end of 2023, the average salary of employees increased by 6.4 percent and reached 90.5 thousand rubles.
Thus, the involvement of immigrants in the industry allows attracting significantly cheaper labor, thereby reducing production costs and the cost of the final product. It will be difficult to stop recruiting them for jobs in Russian companies.
It is possible to replace line staff in production with robots, but this depends on many factors, including technological progress, legislation, and social and ethical issues. Advances in artificial intelligence, robotics, and automation are clear, but in many cases robots still have limitations in understanding the context of performing a range of tasks in factories. Today, the cost of industrial automation is unaffordable for SMEs, and for most employers in Russia, a migrant is a “cheap robot.”
