Russia's worker shortage is so bad the economy is leaning on the Soviet-era practice of using prison labor, think tank says

• Russia is leaning more on prison labor amid a dearth of available workers.
• Income generated from forced convict labor notched 19 billion rubles last year.
• Around a million Russians have fled the country to avoid fighting and escape Russia's economic situation.

Russia's worker shortage is so bad, the nation is increasingly leaning on prison labor to prop up its ailing industries and make up for a lack of manpower.

In 2022, Russia pulled in an estimated 19.1 billion rubles, or around $204 million from forced prison labor, The Moscow Times recently reported, citing dating from Russia's finance ministry. That exceeded estimates that Russia made the year prior, when budget makers anticipated bringing in just 15.8 billion roubles from forced prison labor.

The nation expected to rake in 15.9 billion rubles in 2023 and 16.2 billion rubles in 2024, according to 2021 budget estimates.There are around 26,000 Russian prisoners forced into labor across 1,700 organizations, according to August 2023 data from Russia's Federal Penitentiary Service. That's more than double what was reported in 2022, when 9,300 prisoners were forced to work, according to the research and analytics firm Jamestown Foundation.

Those trends have been sparked by a record workforce shortage in Russia, with around a million Russians having fled the country to avoid fighting or escape Russia's difficult economic situation.

"The Russian economy is facing harsh structural challenges, including the lack of a qualified work force," Jamestown senior fellow Sergey Sukhankin said in a note last month. "The Kremlin has sought to integrate prison labor with certain sectors of the domestic economy to solve this issue."

The use convict labor isn't new to Russia. The practice dates back to the Soviet era's "Gulag" system, where convicts were assigned to work in the riskiest and most "lucrative" sectors of the Soviet Union's economy, Sukhankin said.

Prison labor could eventually evolve into a system similar what was seen in the Soviet Era, Sukhankin added, assuming that Russia's current leadership survives conflict in Ukraine.

"The recent uptick in the use of forced prison labor in Russia is not merely the transient trend of a post-COVID, economically troubled, or war-hurt Russia. In the event that [...] Vladimir Putin survives the war in Ukraine, the use of prison labor in Russia might evolve into a system similar to the Soviet period," Sukhankin added.

Economists, meanwhile, have been sounding grim warnings for Russia's future as the nation continues to be battered by war and western sanctions. Predictions have been as dire as Russia becoming a failed state over the next 10 years, as sanctions bite and its reputation as a pariah state isolates it from world trade.