Experts predicted a “salary revolution” and the end of cheap labor in Russia

The “salary revolution” begins in Russia “right before our eyes,” Dmitry Belousov, economist at the Center for Macroeconomic Analysis and Shortterm Forecasting (CMASF), says. High payments to servicemen set new benchmarks for the market and accelerate the exhaustion of citizens’ readiness for cheap work.

Dmitry Belousov, Head of the Department of analysis and forecasting of macroeconomic processes at CMASF . Alexey Filippov / RIA Novosti

Conducting a special military operation could bring the beginning of the “salary revolution” in Russia closer, Dmitry Belousov, head of the analysis and forecasting of macroeconomic processes at CMASF, said in an analytical note “How the economy developed in 2023 and at the beginning of 2024”.

Servicemen who receive high payments during hostilities will not return to old jobs with multiple less compensation, Belousov said. As a result, the economy will face a new trend – the exhaustion of the population’s readiness for cheap labor.

At the end of 2023, real wages grew by 7.8%, and although the growth rate from quarter to quarter was unstable, it outstripped the overall economic dynamics (real GDP grew by 3.6%). Real incomes of the population increased by 5.4%, consumption of goods and services – by 5.9%, Belousov writes.

“Overheating of the labor market is a reflection of the general overheating of the Russian economy,” Sergei Khestanov, economist, associate professor at RANEPA, says. – And overheating of the economy carries the danger of inflation, devaluation and recession of economic growth. At the same time, the most painful is the transition from growth to decline”.

Previous ArticleNext Article