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Ukrainians Abroad: The Economics and Politics of Labor Migration

Brian Milakovsky
Ukrainians Abroad: The Economics and Politics of Labor Migration

In December, Ukraine’s Infrastructure Minister Volodymyr Omelyan made a statement that raised many eyebrows in his country. “We have no reason to travel to Russia,” he told reporters. “There are trains that go to Moscow, but I hope that Ukrzalisnitsia [Ukraine’s railroad company] will reconsider this policy…. We need to convince Ukrainian citizens that there’s no reason to go to Russia.”

Omelyan’s comments are understandable in light of Russia’s illegal annexation of Crimea and barely concealed military operation in the Donbas. But they are disconnected from the surprising truth that millions of Ukrainians travel back and forth every year to the state that is violating their country’s sovereignty.

Omelyan scornfully referred to his fellow citizens visiting relatives in Russia, but in fact Ukrainians are more likely to go as migrant workers (zarobitchane, from the Ukrainian zarobitok, “wages”). Ukraine’s Statistical Agency estimates that around 4.6 million Ukrainians are working abroad, legally and illegally. That is fully 25 percent of Ukraine’s economically active population.

Migrant work has been an outlet for Ukrainian workers since the 1990s, and became much more widespread after the destructive economic crisis of 2008. Traditionally the majority of zarobitchane hailed from Ukraine’s rural West and migrated both to the EU and to Russia. In 2010 the author lived for several months in a small town in the Carpathian Mountains where almost every household had a relative driving a truck in Poland or working as a nanny in Portugal. Later I met Carpathian zarobitchane working as loggers in the Russian Far East. Ukrainians also are found in the thousands on Moscow’s construction sites and in the oil fields of the north.

Relatively fewer eastern Ukrainians joined the labor migration. But as the industrial economy is depressed by armed conflict and Russia’s trade war with Ukraine, more and more easterners are taking to migrant work. Today I live in the city of Severodonetsk in the government-controlled half of Luhansk oblast, where the massive chemical plant is idled and every wall is plastered with advertisements for buses to Moscow, Rostov, St. Petersburg, and Sochi. These buses are a frequent site in the region’s rural north, where work is especially thin.

But Donbas zarobitchne are also joining the massive labor exodus to Poland, where nearly a million Ukrainians have been officially employed in the past two years. Indeed, experts disagree as to whether Poland or Russia is absorbing the most Ukrainian workers. In a 2016 survey, 36 percent of zarobitchane said they went to Poland to work (45 percent of westerners, 13 percent of easterners) and 25 percent said they went to Russia (14 percent of westerners, 50 percent of easterners). But fully 29 percent of respondents declined to name the country they work in. It is probable that many of them work in Russia but decline to say so because of the political sensitivity.

Espionage and Remittances

The role of zarobitchane is controversial within and outside Ukraine. Both Moscow and Warsaw enjoy counting these migrants as refugees, the former to demonstrate how unbearable life has supposedly become in Ukraine after the Euromaidan revolution, the latter to explain to the EU why Poland doesn’t accept refugees from North Africa and the Middle East.

Vasyl Hritsak, the head of the Ukrainian Security Service (SBU), warns darkly that Russia’s security services attempt to recruit 90 percent of zarobitchane. Many Ukrainians are troubled by the thought that hundreds of thousands of their countrymen are participating in the Russian economy. The journalist Iulia Samaeva wrote, “It’s hard to get one’s head around the fact that some men are heading off to the Donbas as military volunteers, while others are heading off to be construction workers in Rostov.… There are women who fall to their knees for the funeral procession of a neighbor killed in the war but who will let their husbands go to be plasterers in Smolensk without a second thought.”

I asked Andrey, a wallpaper hanger from Severodonetsk who works informally in Moscow and St. Petersburg, whether his neighbors at home criticize him for working in Russia in wartime. “No,” he answers, “everybody understands we’re all surviving as we can.”

In the midst of Ukraine’s profound economic crisis, remittances from zarobitchane in both the EU and Russia are one of the primary sources of liquidity in the country. In 2016 remittances were almost double the level of foreign investment (U.S. $7 billion versus $3.6 billion). These figures were cited by the Ukrainian daily Sevodnya, which also stated that remittances account for 6 percent of Ukrainian GDP and are responsible for stabilizing the hryvnia-dollar exchange rate.

But according to the International Organization for Migration, for every dollar Ukrainian zarobitchane send home, $2.40 remains in their host country. Vice-Prime Minister Hennadiy Zubko has asked how Ukraine will finance its social safety net when so much of the GDP being generated by working-age Ukrainians is going into other countries’ economies. The outflow of migrant workers from Luhansk oblast is skewing that region’s demographic profile: potential workers constitute only 49 percent of the population, while children, students, the elderly, and women on maternity leave make up most of the remainder. These groups all draw on social programs that must be financed by a dwindling workforce.

Labor outmigration might be reaching such a scale that it is actually compensating for the large loss in industrial jobs in Ukraine since the start of the war. I frequently hear from factory managers in the Donbas that they cannot find enough welders, machine and lathe operators. The huge metallurgy plants that dominate the port city of Mariupol used to turn away many applicants but today must advertise on billboards throughout the city to drum up enough workers. With visa-free travel both to Russia and to Poland, where monthly salaries are three to four times higher than in Ukraine, some Ukrainian employers find themselves at a competitive disadvantage.

Organize and Invest

With so many zarobitchane working abroad informally, abuse by unscrupulous employers is inevitable. Guest workers in Poland have even formed their own labor union, Trudova Solidarnist, and held their first strike in Warsaw to protest withheld wages. Ukrainians in Russia are certainly not immune to this problem. Andrey from Severodonetsk rattles off the sums he was not paid by employers: “200, 300, 400 dollars, the last time was 600 or 700.” He adds that in today’s Russian economy even local workers can be left in the lurch. “You really have to know where you’re headed to, you have to know your employer, otherwise—kidayut [they cheat you].”

Considering the growing role of labor migration in their economy, Ukrainians would do well to study experiments in other Eastern European countries that aim to turn migrants into investors. In Moldova, where remittances make up 23 percent of GDP, the Program for Attracting Remittances into the Economy (PARE 1+1) matches investments by labor migrants into micro and small business with government funds. In five years this has resulted in U.S. $20 million in investment and the creation of 1,336 jobs. The International Organization for Migration found that only 1 percent of remittances from Ukrainian zarobitchane are invested, despite the desire of many of these individuals to develop businesses in their home communities. Activating these entrepreneurial aspirations could gradually reduce the need for Ukrainians to look east of their own borders, or for that matter west, for a decent living.

About the Author

Brian Milakovsky

Brian Milakovsky

Independent Analyst
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Kennan Institute

The Kennan Institute is the premier US center for advanced research on Eurasia and the oldest and largest regional program at the Woodrow Wilson International Center for Scholars. The Kennan Institute is committed to improving American understanding of Russia, Ukraine, Central Asia, the South Caucasus, and the surrounding region though research and exchange.  Read more