The paper examines the current migration processes in Russia: the demographic structure of migrant population in Russia, the impact of labor migrants and recent government regulation in this area. Low birth rate and population ageing are the main reasons for the evolving problem of labor shortage. It can be partly solved by external inflow of labor migrants. However, migration processes powerfully influence current fiscal politics, ethnic and religious conflicts. Being at the edge of a multilevel crisis, Russia should develop a proactive immigration strategy that could contribute to economic growth and social stability. Today, illegal immigration in Russia is a serious problem. There is a considerable difference between the official figures and the actual number of irregular labor migrants in Russia. Although their actual number is unknown, it is estimated that the number of illegal labor migrants is several times greater than the number of the registered migrants. A policy preventing the irregular inflow and employment should become one of the top priorities for migration authorities. The contradictory policies of the host country, Russia, have consequences not only for the people, having decided to relocate, but also for their children, second-generation migrants. The host country has lost the opportunity to foster a loyal, healthy, educated and economically active population.