In the last year alone, from July 2023 to June 2024, payments to soldiers involved in the war, as well as to the wounded and relatives of those killed in action, were expected to amount to around 2.75 to 3 trillion roubles, depending on an estimate of the average size of the Russian military contingent (in total, about a million Russian citizens have apparently already participated in the war).
This amount consists of 1.55–1.8 trillion rubles in monthly payments to military personnel (including one-time contract signing bonuses) and approximately 1.2 trillion rubles in payments for injuries, disabilities, and deaths.
Thus, the total estimated amount of payments corresponds to 1.4–1.6% of Russia's expected GDP in 2024, 7.5–8.2% of all federal budget expenditures for this year, and 3.4–3.7% of all consumer spending by Russians in 2023.
During the 12-month period under consideration, the combined consumer spending of Russians increased by approximately 8 trillion rubles, and the growth in deposits amounted to about 4.5 trillion rubles. As can be seen from these calculations, the income of Russian citizens (military personnel and their dependents) from the war plays a significant role in maintaining high rates of consumption and savings growth – alongside wage growth, which is the main focus of economists.
Over the past year and a half to two years, the war has become an important part of the Russian labour market and the aggregate incomes of citizens. In depressed regions where commercial military service contracts are very popular, people regularly refer to going to the front in Ukraine as ‘work’ or ‘shift work’, according to observations from the ethnographic project of the Public Sociology Laboratory. But what is the size of this specific labour market, and what incomes are earned by its ‘workers’? What contribution do they make to the overall income growth of citizens noted in Russia over the past year and to the expansion of their consumption?
The exact number of Russian troops in Ukraine is unknown. In June 2024, Vladimir Putin claimed that 'almost 700,000' people were in the combat zone, while in December 2023, he mentioned the figure of 617,000 servicemen. More modestly, experts from the Royal United Services Institute (RUSI) estimated the number of troops in Ukraine at 470,000 at the beginning of 2024. Since the beginning of this year, recruitment for the front in Russia has been particularly active, and the size of one-time payments for new contractors has been steadily increasing. In early April, the Ministry of Defence reported 100,000 new contractors since the beginning of the year. Foreign intelligence agencies also believe that about 30,000 people are being recruited for the war each month, though some experts consider this figure to be inflated (→ Re: Russia: People vs. Drones). In early July, Deputy Secretary of the Security Council Dmitry Medvedev announced that 190,000 contracts had been signed since the beginning of the year.
Thus, in the official picture (based on statements by Putin, Medvedev, and the Ministry of Defence), to the 617,000 military personnel at the end of 2023 were added 190,000 recruits (totaling 800,000), with an outflow of about 100,000 personnel during the same time, and the current group numbers about 700,000 (according to Putin). The 'lower' estimate is 470,000 at the end of 2023 and about 150,000 new contractors since the beginning of 2024 (about 25,000 per month). Considering that the size of the contingent increased during the year due to the new effective contract, it can be roughly estimated that its average size over the year (from July 2023 to June 2024) is 600,000 in the 'upper' and 500,000 in the 'lower' estimate.
But that is far from all. According to a recently published study by Meduza and Mediazona (researchers built an operational estimation model based on data from the Register of Inheritance Cases), the Russian army lost about 120,000 men killed during the two and a half years of war. A projection of data from the BBC and Mediazona's register of names (57,700 at the end of June), which, according to control measurements, includes about half of the dead. According to British military intelligence, the total number of killed and wounded during the war has exceeded half a million people, of whom about 150,000 were killed. The same figures were cited in May in an interview with Novaya Gazeta Europa by French Foreign Minister Stéphane Séjourné. We, of course, do not know what portion of the approximately 350,000 wounded have returned to service, but it can be roughly assumed that the total number of people involved in military actions (500-600,000), those who have gone through the war (served the contract and managed not to renew it), the killed, and the wounded is approaching or has exceeded one million people.
This is about 1.3% of the Russian labour force. From an economic perspective, the war draws these people away from the productive sector, exacerbating the labour market shortage, which in turn intensifies the trend of rising civilian wages. However, in terms of labour compensation and income, this represents a significant segment of the budget expenditures and the overall income of Russians from frontline 'work' activities.
The minimum salary for a war participant after a 10.5% indexation in October 2023 is 210,000 rubles, according to Deputy Defence Minister Tatyana Shevtsova. This amount includes the base salary and allowances for years of service, class category, 'effective and conscientious performance of duties', etc. The average salary is likely higher, especially considering various bonuses and incentive payments. If we assume an anchor sum of 240,000 rubles, then in the 'lower' estimate (in which the average size of the contingent is 500,000), contract payments and annual payouts should amount to about 1.44 trillion rubles; in the 'upper' estimate (in which the average size of the contingent is 600,000), it would be 1.7 trillion rubles. Additionally, approximately 120 billion rubles can be estimated for one-time contract signing payments: in late summer 2023, the average payment was about 380,000 rubles, which increased to 480,000 by June 2024, with 200,000 to 300,000 contracts likely signed over the past year. Thus, total payments to combatants over the past year could amount to between 1.55 trillion and 1.8 trillion rubles.
However, it should not be forgotten that a significant portion of financial expenditures on the army at war consists of payments for the killed and wounded. Analysts at War on the Rocks attempted to calculate this part of the expenditures. The family of a deceased soldier is entitled to several large payments. The one-time payment from the Ministry of Defence ('presidential') is 5 million rubles. This amount includes 3 million for the injury and 2 million due to death. In addition, two payments – 4.9 million ('one-time allowance') and almost 3.3 million ('insurance sum') – are received by the heirs from the insurance company ‘Sogaz’, a subsidiary of Gazprom that has a contract with the Ministry of Defense. Finally, in some regions (about 60), local authorities pay an additional 1-3 million rubles (these data are extremely incomplete and fragmentary). For their calculations, War on the Rocks analysts took an average amount of 14 million rubles that the heirs of a deceased soldier can claim. If this amount was paid to 100,000 deceased, the total payment amount would be another 1.4 trillion rubles. Based on the two estimates provided, we believe that the total number of deceased is higher, and over the year from July 2023, it likely amounted to about 50,000 people. Accordingly, payments could amount to about 0.7 trillion rubles.
In the case of injury, a soldier receives a one-time payment of 3 million rubles from the Ministry of Defence, as well as insurance payments ranging from 80,000 to 330,000 rubles, a one-time disability payment of between 820,000 and 2.5 million rubles, and additional payments from the regions (War on the Rocks analysts did not account for all these additional payments). If we base the injury payment on a figure of 4 million rubles and estimate the number of wounded since the beginning of the war at 300,000, the total payments would be worth 1.2 trillion rubles, and for approximately 120,000 wounded over the past year (a monthly average projection), the amount would be 480 billion rubles. Thus, the killed and wounded over the entire course of the war could have cost the state up to 2.6 trillion rubles (this estimate is higher than that provided in the War on the Rocks material), and for the past year – approximately 1.2 trillion rubles.
In total, in the last year alone, the salaries for those fighting, along with payments for injuries, disabilities, and deaths, may have amounted to between 2.75 and 3 trillion rubles, depending on the estimated size of the contingent. This corresponds to 1.4-1.6% of Russia's expected GDP in 2024 (191 trillion rubles) and 7.5–8.2% of all federal budget expenditures for this year (totaling 36.7 trillion rubles). Finally, this represents 3.4-3.7% of all consumer spending by Russians in 2023 (Rosstat estimates this at about 82 trillion rubles).
According to Rosstat, the increase in consumer spending in 2023 was 6.9 trillion rubles, and the increase in savings was 6.1 trillion. In the first quarter of 2024, Rosstat estimates the annual increase in consumer spending at 2 trillion rubles and the increase in deposits at 0.5 trillion. Considering that most of the increase in 2023 occurred in the second half of the year, the total increase in consumer spending for the year (July 2023-June 2024) can be estimated at 8 trillion rubles, and the increase in deposits at 4.5 trillion. In this case, the total amount of payments to war participants and their dependents are equivalent to 22–24% of the increase in consumer spending and deposits of Russians over these 12 months. Of course, we do not consider the entire amount of payments as an increase in income, but this comparison indicates the significant impact military payments can have on consumption and income, alongside the factor of wage growth, which economists primarily focus on (→ Re:Russia: Windfall Revenues).