Wages Will Stop Growing: Why Russian Incomes Are Slowing and Could It Lead to Recession

The labor market in Russia is entering a new phase—after several years of rapid wage growth, a period of cooling is beginning. According to a forecast by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF), the growth of household incomes will slow sharply in the coming years against the backdrop of economic stagnation.

While real wage growth in 2025 is estimated at only 3.5%, starting from 2026 it will decrease to 1.2–1.7% per year. The economy, according to analysts, could enter a recession as early as the beginning of the year, and by December GDP growth will not exceed 1%.

Signals of a cooling labor market are also confirmed by data from the Bank of Russia. A survey by the regulator showed that most companies do not plan to raise wages in the first quarter of the year. This contrasts noticeably with the situation in recent years, when businesses were forced to actively increase payments due to a shortage of personnel.

Recruitment numbers tell the same story. According to data from the job search and hiring service GdeRabota.ru, which the company shared with MSK1.RU, the growth rate of salary offers has noticeably slowed. While in 2024 the average monetary offer in job postings grew by 46.1%, in 2025 it grew by only 28.2% without accounting for inflation. In essence, this means a significant portion of the growth is being eaten up by price increases.

The Ministry of Economic Development forecasts that nominal wages will increase by 7–8% annually over the next two years. However, given current inflationary expectations, the real incomes of Russians will grow by only 1.5% or not at all.

Simply put, formally wages will grow, but workers« purchasing power will remain at the same level or even decrease. For residents of large cities, including Moscow, this is particularly sensitive against the backdrop of high costs for housing, transport, and services.

Yekaterina Agayeva, General Director of the GdeRabota.ru service, highlights several key consequences of slowing wage growth. The first is increased competition for qualified personnel. Salary ceases to be the main motivational tool. Companies will be forced to seek new ways to retain employees—offering flexible schedules, remote work, developed corporate culture, extended benefits packages, and clear career prospects.

The second factor, according to Agayeva, is increased interest in remote and overseas work. Specialists, especially in IT, marketing, design, and analytics, will more actively consider freelancing and collaboration with foreign employers, where incomes are higher and less dependent on the domestic economic situation.

The third is the risk of an increase in «gray» (under-the-table) payment schemes. With limited opportunities for official wage increases, some employers may revert to «envelope» payments to retain key employees. This increases risks for both workers and the economy itself.

«In conditions of wage stagnation, it is important for employers to emphasize non-material benefits and long-term employee motivation. Job seekers should consider that rapid income growth in the coming years is unlikely and approach career planning more consciously,» notes Agayeva.

As is evident, the period of easy wage gains is ending. The labor market is becoming more mature, for businesses and workers this means the necessity to adapt to a new reality.

«The slowdown in wage growth is not just a temporary hiccup, but a systemic diagnosis of the current market condition,» says Vladimir Turman, an ideological marketing strategist working with major Russian and international companies.

«We are seeing a transition into a phase where incomes no longer grow »by default.« Central Bank surveys confirm: employers in the first quarter are no longer budgeting for indexation. It is important to understand: in such conditions, nominal wage growth does not mean real income growth. With inflation at 4–6%, even formally positive dynamics turn into a decrease in purchasing power. In essence, we are talking about the stagnation of the population»s real incomes,« says Turman.

According to the expert, Russian businesses are operating in a «mode of heightened caution»: high borrowing costs, investment restrictions, and uncertainty force companies to focus on cost control rather than expansion. This is compounded by automation, and both factors constrain the growth of the wage fund.

According to the expert, wage growth will now depend not on the general state of the market, but on the individual specialist«s value, their productivity, and affiliation with growing sectors.

«For business, this is a signal to reassemble strategies: increasing efficiency and investing in technology become more important than simply inflating the wage fund. In the new conditions, only those who can create added value faster than costs rise will win. This applies both to entire companies and individual professionals,» says the expert.