By Murad Rakhimov | 2025-05-08

TASHKENT -- Across industries from construction to coal mining, workers in Russia are going unpaid -- or paid late -- at rising rates.

Official complaints about wage delays surged by 37.4% from 2023 to 2024, according to the country's own labor watchdog, Rostrud. Manufacturing, agriculture, mining and construction are among the hardest-hit sectors.

Delayed wages are officially blamed on cash shortages, reduced output, unpaid invoices and debt servicing, but some causes stem directly from Russia's war in Ukraine, said Meruert Makhmutova, director of the Public Policy Research Center in Almaty.

"The labor shortage is growing because the able-bodied population has been sent into war and to work in businesses in the military-industrial complex. As a result, civilian businesses are luring workers with promises of high salaries," Makhmutova told Kontur.

Surge in unpaid wages

While wage arrears grow, businesses are also under financial strain.

Rising taxes on personal and corporate income, along with the Central Bank's high benchmark interest rate of 21%, have increased borrowing costs. Many companies are heavily indebted.

"So it's entirely natural that businesses' solvency is very low," Makhmutova said.

The accumulation of unpaid wages, combined with other pressures, could lead to reduced economic activity, more loan defaults and a lower standard of living, she added.

Russia's budget is also under pressure. With Urals crude trading below $59 per barrel -- well under the $69.70 benchmark in the federal budget -- the deficit is widening, limiting timely state support for sectors like the military-industrial complex.

The National Wealth Fund, 60% of which is held in yuan, may be affected by global market shifts, said Makhmutova. A weakening of the Chinese currency amid US-China trade tensions could reduce the fund's value.

According to the state statistics service, known as Rosstat, debt for unpaid wages surged by 43% in 2024, a trend that has continued this year.

As of January 1, it was 508 million RUB (about $6.2 million), without accounting for small and medium enterprises. By the end of February, it amounted to 1.2 billion RUB (about $14.7 million).

What do the labor unions think?

The Rostrud report also highlights violations of migrant workers' rights, particularly in sectors like construction and taxi driving.

Common issues include excessive hours -- often 10-hour shifts -- without proper documentation or extra pay. In 2024, 10% of all recorded labor violations involved wages owed to foreign workers.

The Federation of Independent Trade Unions of Russia has expressed cautious concern.

Department head Oleg Sokolov said the union is "seeing a problem of nonpayment of wages," which is more acute than before, adding that while current delays are "not critical," the trend is growing.

Russia's economic decline is partly due to its reduced integration with the global economy since the annexation of Crimea in 2014 and the 2022 full-scale invasion of Ukraine, said political analyst Anvar Nazirov.

"The Russian monopolies lived on the export of raw materials, and that [business] filled the budget coffers," he told Kontur. "All the main sources for replenishing the budget, like Gazprom and others, have been in deep crisis since the imposition of [international] sanctions."

Declining support for the war

A February phone survey by the Chronicles research project found that 54% of Russians say the war has harmed their well-being and daily life, while only 9% saw any benefit.

Although 36% reported a direct decline in their financial situation, more respondents cited broader negative impacts.

"This assessment correlates with weak support for the war and less willingness to vote for [Russian President Vladimir] Putin," Chronicles reported at the time.

Alisher Ilkhamov, director of the London-based civil society organization Central Asia Due Diligence, attributed the 18-point difference to three factors.

First, he said, some Russians feel economic pressure not through personal loss but through broader signs of decline: rising inflation and shrinking industries like automotive and aviation.

"Even if you personally aren't yet experiencing financial hardship, your well-being might be negatively affected by the overall deterioration of the economic situation in the country," Ilkhamov told Kontur.

Second, frustration is growing over Russia's mounting personnel losses in Ukraine, which he noted far exceed those of the Soviet war in Afghanistan, a conflict that triggered significant public backlash and contributed to the collapse of the USSR. Some respondents, he added, have had friends or relatives who were killed or seriously wounded at the front.

Finally, Ilkhamov pointed to a segment of Russians who reject the war on moral or political grounds.

"This is a key electorate for the political opposition even if its members aren't speaking out openly," he said. He described them as "the gene pool of Russian society that will function as the foundation of democratic transformations if the ruling regime changes."