Russia is Caught in an Unemployment ‘Death Spiral’
Paul J. Warburg
22 min
Russia's wage growth is inherently unsustainable, and therefore, actually, very bad news for the average Russian. In the long term, unemployment will probably skyrocket.
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Vladimir Putin
Chapters
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0:00
The Unemployment Paradox
Russia's near-zero unemployment is actually a sign of economic distress rather than prosperity. Once funding ends or the war stops, the private sector will vanish, causing unemployment to skyrocket.
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3:01
Historical Precedent: The Black Plague
Extreme labor shortages historically led to violent revolts before eventual economic restructuring.
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6:24
Unsustainable Wage Growth
Russia's wage increases are driven by artificial factors, not productivity, making them unsustainable.
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7:43
The Pendulum Swing
When employers cannot profit due to high wages, they go out of business, causing future unemployment.
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10:54
Causes of Labor Shortage
War and defense spending have drastically reduced the available workforce while driving up demand.
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15:53
Artificial Economic Stimulus
Russia has deployed over half a trillion dollars from savings and loans to prop up the economy. The government-funded defense sector pays unlimited wages, squeezing out profit-driven private businesses.
Key points
- 0:58
Russia's current unemployment rate is approximately 2.5%.
- 0:58
Seventy-three percent of Russian businesses cannot find enough workers.
- 0:58
In Moscow, there are nine job openings for every available worker.
- 3:01
Historical labor shortages led to violent peasant revolts before democracy emerged.
- 7:43
Healthy economies require a balance between worker wages and employer profits.
- 7:43
A healthy unemployment level for Russia is considered to be approximately 4%.
- 10:54
War has reduced the workforce by killing or disabling many workers.
- 13:47
Defense spending has pulled workers away from the civilian economy.
- 15:53
Russia deployed about half a trillion dollars as artificial economic stimulus.
- 15:53
The defense sector pays unlimited wages because it does not care about profitability.
- 15:53
Private employers are being forced out of business due to inability to compete.
- 0:00
Unemployment will likely skyrocket once the war ends or funding runs dry.
Who and where
People · 1
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Vladimir Putin 1
President of the Russian Federation
Photo 1
1. Photo: Пресс-служба Президента России, CC BY 4.0, via Wikimedia Commons · Wikidata · redrawn in our house style (Vladimir Putin)
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