A Russian Mobilization Would Likely Leave Low-Skill Workers Poorer, Not Richer

KSE Institute has released a new paper, “Fewer Bodies or Cheaper Bodies? What a New Wave of Russian Mobilization Would Do to the Wages of Those Who Stay Behind.” A call-up would take more men out of civilian work, but it would also allow the state to fill its ranks by order instead of paying the going rate for contract soldiers.

Drawing on 16 months of Russian vacancy data, regional decrees, and casualty records, the paper estimates how these competing effects would shape civilian wages and why another mobilization could leave the low-skill workforce poorer rather than richer. This would add to the political costs facing the Kremlin as it considers whether, and on what scale, to pursue another mobilization.

The military industry has cut hiring sharply. Over the past year, weapons and aviation manufacturers cut advertised positions by 37%, other military industries by 14%, and drone makers by 13%, while civilian job postings rose by 7%. Military-industry wages rose by 6% versus 15% for civilian pay. Most of the growth in civilian vacancies comes from a few state-financed megaprojects tied to Kremlin-connected and foreign contractors. Without them, advertised positions across the rest of the civilian labor market fell by 3%.

The army recruits from the bottom of the labor market. 94% of advertised military positions ask for neither experience nor a qualification, compared with 46% of civilian vacancies. About a third of military-industry vacancies target the same workers. The exception is Alabuga, Tatarstan’s drone campus, which hires the same men as the recruiting offices at about a sixth of the contract pay.

Sign-on bonuses work like a marketing tool. The median payment rose from 1.5 million rubles to 2.5 million over two years. Many payments carry an expiration date, are extended a month at a time, or are cut and then restored. Increases appear to have little to do with local economic conditions. Regions raise the payment after losing more men, which points to a shrinking pool of willing recruits.

The offer is enormous next to what these men could earn elsewhere. The contract wage alone is about five times the civilian pay available to the low-skill workers the military targets. With the sign-on bonus added, one year of service is worth a median of about nine years of local income, ranging from about seven years in Kirov to nearly fourteen in Kabardino-Balkaria. Veteran benefits such as loan forgiveness, land, and grants come on top.

Removing men raises wages, but only slightly. Regions that have sent more soldiers have seen faster real wage growth, with an estimated additional 0.1 to 0.2 percentage points for every 100,000 men removed from civilian employment. Because a draft would largely replace the roughly 400,000 men a year the contract system already takes, only the excess adds to scarcity. Assuming mobilization replaces contract recruitment, that implies about 0.1 to 0.2 percentage points of additional real wage growth for a call-up of 500,000, and 0.6 to 1.2 points for a million.

The money that mobilization withdraws is far larger than the gain. The military’s offer accounts for more than a quarter of all money offered to this pool of workers, while taking about 4% of them. Sign-on payments alone come to about 1 trillion rubles a year. The scarcity gain would be worth 20 to 200 billion rubles to the pool’s wages, while the sign-on payments that mobilization could eliminate would be five to more than fifty times larger.

The likely result is a poorer low-skill workforce. The small wage gain would be spread thinly across everyone who stays, while the loss from withdrawn sign-on payments would fall on the men and regions that now receive the contract money, most heavily where local pay is lowest. Scarcity would only catch up with the withdrawn sign-on money at a call-up of roughly three and a half to six and a half million men – well beyond the scenarios considered in the paper.