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Between robots and migrants
If Russian companies decide to robotize production on a large scale, 12-15 million employees will be released, and the current "job seeker's market" in the Russian Federation will again become an "employer's market." The International Trade Union Center reported on this at the Trade Union Forum in Gelendzhik. However, the rapid growth of investment in automation is restrained by restrictions on technology imports and the still relatively low cost of labor on the Russian market. Robotization still seems too expensive an alternative to finding and importing labor.
The Russian labor market is at the point of "overheating". According to the report of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), the number of vacancies per employee is close to the historical maximum. Dmitry Belousov presented the analysis and forecasting of macroeconomic processes at the forum "Trade Unions. XXI century. Image of the future". Based on Rosstat data, CMASF calculations and international studies of the world labor market.
According to the report, conditions on the labor market remain difficult, and unemployment continues to decline rapidly, reaching historic lows. Demand for labor has stabilized (excluding seasonal factors), but it is unclear whether this will be a short-term "trend reversal." According to Rosstat, unemployment in Russia has already dropped below 2.4%, and wage growth over the past year and a half has nominally exceeded 30% (see Kommersant, October 3). According to the previous CMALC report, labor demand has grown steadily over the past two years and currently exceeds 76 million jobs. Among the factors that have influenced the decline in labor supply in the Russian Federation over the past two years, experts noted demographic trends. During this period, the number of Russians in the most economically active age group (20-39 years old) decreased by millions. . The decrease in migration also had a certain impact. If before the pandemic, 4.5 million people worked in the Russian Federation year-round, now this number has decreased to 3.5 million.
As noted in the CMASF report, the current labor shortage in Russia is partly a paradoxical result of overemployment.
Governments and society traditionally support the artificial employment of enterprises (for example, through demands to create new jobs that are maintained even in the event of a labor shortage). Such a conservative approach reduces labor productivity and ultimately leads to underestimation. We remind you that by the end of 2022, the level of labor productivity in the Russian Federation had fallen to its lowest level in the last ten years (see Kommersant of October 9, 2023).
Because of this, companies have no incentive to modernize their company technologies and replace human labor with robots and machines (and innovative activity in the Russian economy as a whole is low). As a result, insufficiently qualified personnel play an increasingly important role in production, which affects the quality of products. Before the 2019 Covid shock, there were 5 robots per 1,000 workers in Russian industry, while the global average was 9.9 per 1,000 workers. As a result, there is a lack of “reserves” of workers (including the reluctance of young people to take up blue-collar jobs) and “reserves” of laid-off workers in industry and construction.
According to the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), automation of Russian production could now provide employment for up to 12-15 million people, as well as eliminate the current “hidden industrial overpopulation” and the chronic gap in labor productivity between Russia and technologically advanced countries.
If this scenario comes to fruition, demand for the use of platforms will also increase. Since employers will once again be able to choose their employees, they will likely favor people with whom interaction requires fewer social obligations.
However, the possibility of implementing such a scenario of robotization of mass production does not yet seem entirely realistic. The share of labor costs in the Russian Federation's GDP in 2022 was low, and even if it increases, by the end of 2023 this figure will be far from the maximum, which may lead to companies making capital investments in technological re-equipment. This also limits modernization (in terms of access to equipment and technology) and sanctions. The success expected by the authorities in establishing the import of foreign labor is not in favor of robots. For example, from January to September 2024, about 100 thousand citizens of Uzbekistan were employed on an organizational basis by Russian companies. This follows from the statement of the Republican Agency for External Labor Migration for the same period in 2023.