Russia faces ongoing challenges with gray and black employment. The plan is to start by creating a registry of employers who fail to properly register workers and to tighten oversight of self-employed individuals through digital networks. The authorities then intend to press for information from the unemployed and their households to verify how people survive. It remains to be seen whether these measures can reverse a trend long established in the shadow economy, which in many sectors has become so entrenched that it is sometimes treated as if it were the system itself.
Estimations of the informal economy’s share of GDP in Russia vary widely. Figures range from about 15% to 40%, depending on the source. Rosstat tends to report smaller figures, while international studies often present higher estimates. In monetary terms, informal activity is typically discussed as totaling roughly 10–20 trillion rubles annually. The dynamics suggest a dip in the shadow sector up to 2015, followed by renewed growth. The IMF estimated the share of the shadow sector at 33.7% in 2018, higher than in Belarus (44.5%) and Georgia (53%), but well above Italy (23%) and well above the United States and Germany around 7–7.7%. Regardless of the exact figure, a substantial portion of markets in Russia operates outside formal channels, and the consequences are widely viewed as negative.
The reasons behind persistent informality are complex. The main movements of money are increasingly electronic, which can facilitate cashless transactions yet also makes informal activity easier to hide. The legalization of private traders through self-employment appears to show some positive signals, with the number of self-employed doubling on average each year: 1.6 million in 2020, about 3.5 million in 2021, and roughly 6.5 million in 2022.
Despite these trends, the share of people working without formal contracts remains notable. There are many cases of workers across disciplines such as housekeeping, tutoring, and caregiving being paid in cash, without contracts or taxes, and with minimal social protections. Observers note that even some salaried workers seek arrangements that resemble informal terms, accepting envelope wages and the absence of regular vacations or sick leave as a means to avoid bureaucratic costs. This pattern invites deeper examination rather than simple judgment.
When examining the freelancer, or self-employed worker, a common refrain is that many do not aim to pay taxes. A 4% rate is often cited as acceptable by some, reflecting a perception that the self-employment regime remains non‑restrictive. A lack of understanding about what must be paid to the government also plays a role. Critics argue that civil liabilities and public needs such as road maintenance, infrastructure, schools, and hospitals are not addressed adequately by some self-employed individuals. In some discussions, self-employed individuals are exempt from certain contributions, such as health insurance, which is controversial in public policy debates.
Statistics show a broader picture: the state collects not only income taxes but various indirect levies—vehicle taxes, environmental fees, and value-added tax (VAT). The argument often raised is that public funds should be used to improve security, social services, and public amenities, rather than to disproportionately burden those who are legally employed yet seek cost-effective structures. This line of reasoning points to a crisis of confidence in the system, suggesting that the state must convincingly demonstrate the value of formal employment to those who earn their livelihoods within it.
Some analysts observe that growth in officially registered self-employment is driven not by independent contractors seeking clients but by workers who operate similarly to traditional employees and benefit from the institutions that support formal work. This shift highlights the role of the platform economy, where many workers are technically self-employed but rely on platforms for orders. While some couriers and drivers advocate for safety and social protections, they often find themselves facing higher costs as employers attempt to constrain expenses. The tension underscores a broader question about the balance between flexibility in work arrangements and the protections workers expect from formal employment.
Attention also centers on individuals who reportedly prefer gray salaries. Authorities argue that the prevalence of under-the-table wages among a sizable segment of the workforce creates persistent difficulties in tax collection and social welfare. The perceived greed of some employers and the economic pressures faced by workers converge in a common challenge: the choice between a higher net wage that remains informal and a lower, formal wage tied to social guarantees. In situations where debt obligations and living costs are high, many people opt for the envelope arrangement, a decision that underscores the ongoing trade-off between immediate income and long-term security.
Questions about responsibility prompt scrutiny of employers who offer or tolerate such wage structures. There is a belief that administrative and tax burdens push some employers toward informal practices. Yet, this view is balanced by concerns about the broader business environment, including the risk of bankruptcy and the need for a viable model that fosters fair pay and compliant practices. The country faces a delicate balance: improving market order while ensuring that businesses can operate without being unfairly penalized for making tough competitive choices.
There are also segments of the population who prefer gray salaries for personal reasons. Some are reluctant to assume financial obligations or to engage with formal credit systems. In some cases, this leads to concerns about loans and alimony. Authorities point to the limits of enforcement and the ongoing need for coordinated oversight to prevent fiscal leakage. The question is whether better governance and stronger enforcement can deter deviations without stifling legitimate enterprise.
In sum, the tools for reform exist, but the target remains elusive. The state faces a broad spectrum of challenges, from improving institutional efficiency to ensuring fair treatment for workers. The dialogue around labor market reform calls for clear goals, practical policies, and sustained commitment. The country continues to evaluate whether it can curb informal practices while maintaining economic vitality and protecting the social fabric that supports workers and their families.
Note: The perspectives shared represent a viewpoint on policy and labor-market dynamics and should be considered alongside other analyses and official data from relevant authorities.