How much do Russian soldiers get paid? Russia’s economy weakened by war costs

Even before Ukraine launched its surprise operation in Russia’s Kursk region, reports from several economically developed Russian regions spoke of a large pay increase for soldiers recruited for the front.

In this particular war, Russia has opted for a mixed mobilization model and hiring of soldiers. However, the Pay-for-play fighting model for both categorieswith the only difference that the hired part of his Army at the front voluntarily accepted the job and the mobilized part was forced into service, they are still paid.

From July 2023 to June this year, The Russian state paid participants in the Ukrainian warthe wounded soldiers and the families of the deceased around 3 trillion rubles (30 billion euros), which is equivalent to 1.5% of Russian GDP, according to a study by the Re:Russia project.

Economic incentives are needed to recruit more soldiers

The region of Krasnodar It is one of the main administrative units of Russia in terms of payment for recruiting soldiers frontline soldiers, and recently raised the lump sum for enlisting in the war to the equivalent of about 16,000 euros. This is considered a considerable sum for many poor Russians.

By comparison, Russia’s second largest city, St. Petersburg, offers some 11,000 euros for new recruitsand the capital, Moscow, increased its reward for mercenary soldiers to about 19,000 euros.

Since the increase in the payment for recruiting Russian soldiers occurred before the Ukrainian Kursk offensive, this trend cannot be attributed to this concrete change in the dynamics of war.

As Alexander Clarkson, a professor at King’s College London, explained to ‘Euronews’: “Russia is running out of willing volunteersbut he does not want to repeat an unpopular mobilization. That is why he continues to raise the signing bonuses.”

The shortage of volunteers for war is not the only reason for the Increased Russian state spending on recruitment of front-line soldiers.

A competition between the Armed Forces and the war industry

Ivan Kłyszcz, researcher at the International Centre for Defence and Security from Tallinn, told Euronews: “Competitive salaries and better conditions for the military also play an important role.”

He Russian Army must now compete with the Russian military industry, booming and also hungry for labour. This portrays the dilemma facing Russian leaders: recruit soldiers or hire workers. Mart Kuldkepp, a professor at University College London, sums up the problematic crossroads in which the Russian war effort finds itself for ‘Euronews’.

“He Ministry of Defense has to compete more and more with other employers, even in strategically important sectors. This creates not only a wage competition, but also dilemmas about which state interests to prioritize.”

The question of the military needs facing the needs of the industry cannot be easily resolved in the case of Russiaespecially now that the number of workers Immigrants continue to decline due to increased repression police following a series of terrorist attacks in Russia by radical Islamist groups.

For example, the flow of labor migrants from Tajikistan to Russia in the first half of 2024 decreased by 16%, according to figures fromThe Ministry of Labor of Tajikistan.

The workforce is running out

Edward Hunter Christie, a former NATO official and senior researcher at the FIIA, put the problems facing Russian leaders into perspective for Euronews.

“Whether workers are eliminated through compulsory military service or are attracted by high military salaries, in both cases there is a risk of shortage in the civil economy“, he says.

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“Ultimately, it is possible that wages have to increase too in certain sectors of the economy. All this will be quite costly for the Russian state, and will also fuel inflation.”

Inflation and labor shortage

The inflationcoupled with the aggravating shortage of labor, constitutes a black cloud hanging over the Russian economy, which has shown signs of growth after the transition to war mode.

Janis Kluge, Senior Associate at German Institute for International and Security Affairshe told Euronews: “The only companies that can prosper in this environment are suppliers to war.”

“The inevitable consequence is that the economy will contract and over time, Inflation will also reduce people’s income. The severity will depend on how sanctions evolve and the price of oil.”

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Exodus of Russian citizens

Russia’s labor problems are exacerbated by the fact that since the start of the all-out war against Ukraine, there have been massive increases in the number of workers in the country. waves of mass emigration of the youngest and most qualified workforce.

Maria Snegovaya, Senior Research Fellow for Russia and Eurasia at the Center for Strategic and International Studiestold ‘Euronews’: “The total number of emigrants from 2022 is estimated at around between 500,000 and one million peoples, many of whom are younger, better educated and working in key industries such as the information technology sector.”

“If you add to this thes mobilized and volunteers in generaldue to the combination of coronavirusthe mobilization and the war-related casualties Between 2020 and 2023, Russia’s labor reserve has lost between 1.9 and 2.8 million people.”

The aging of the population

The age gap in the Russian population must also be taken into account. According to the latest Rosstat data for 2024, The absolute number of pensioners in Russia is about 41 million.

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It is not surprising that almost half of Russian industrial enterprises already declared last year that they are short of staff. As Snegovaya concludes: “The economy is overheating.”

“The Central Bank of Russia has raised the interest rate even above its current record level of 18%. The Central Bank’s changes will not affect the real sources of inflation: “Rising consumer spending driven by defense spending, social spending for warfighters, and labor shortages.”

Even with the war economy going, Russian GDP has grown “only 0.8% a year on average,” Kluge says. As Inflation and labor shortages are increasing and Ukraine brings the war into Russian territory, the Russian economy does not seem to be in good shape.