Page 30 - RusRPTJuly18

4.5.2 Income dynamics
Real incomes of Russians in 2017 continued to fall - by 1.7%, but poverty for some reason decreased: from 13.3 to 13.2%, according to preliminary data of Rosstat. The explanation of this paradox should be looked for in the methodology for calculating the subsistence minimum, experts of the Institute for Social Analysis and Forecasting (INSAP) of the Russian Academy of Science write in the monitoring.
The minimum consumer basket, according to which it is considered, increased by an average of only 2.6% in 2017 , noticeably behind the average annual inflation of 3.7%. In October-December, inflation in Russia amounted to 0.2% against the previous quarter: products fell by 0.4%, non-food products and services increased by 0.8 and 0.2%, respectively. Consumer basket at the same time fell in price by 5.2% to 9786 rubles: products - by 3.4%, non-food products - by 6.7%, services - by 7.4%. It includes a limited list of foodstuffs, in which there are many much cheaper vegetables, the authors write: the cost of potatoes, cabbage, onions, carrots ("borscht recruitment") in the IV quarter fell by 28-43%.
One must make at least 120,000 rubles ($1,875) monthly in Moscow or 60,000-90,000 rubles ($937-$1,405) in Russia’s regions to join the middle class . ACRA’s analysts arrived at this estimate by determining the minimum salary that allows someone to comfortably cover expenses, invest in real estate and a car, and have something left over to save. Russia's average wage is just over 40,000 rubles ($625). The study found significant regional differences in prices for basic goods. The cost of living (especially for real estate) is much higher in Moscow and St. Petersburg than in the rest of the country. There is also a big difference between natural resource-rich regions and others. Extra income from extractive industries pushes up the cost of real estate and consumer goods, especially in the Ural and Far East Federal Regions where inhospitable conditions make real estate hard to build and maintain. Throughout the country, the highest-paid Russians make about 15 times as much as the lowest-paid Russians.Real income took a hit in Russia after the 2014 crisis and it continued to fall through 2017. The percentage of middle-class Russians also fell, losing about 6 percentage points between 2014 and 2015. The middle class has begun to grow again as real income starts to recover, but it still hasn’t reached the 2014 level of 36-38% of the population. Given economic stagnation and growing pressure to demand wage growth in line with the recent May decrees and pension reform, the Kremlin is watching these figures.
Minister of Finance Anton Siluanov believes that in Russia the average pension by 2024 will significantly increase and will amount to about RUB20,000 . Earlier, the Minister of Labor Maxim Topilin said that in 2018 the average pension will be RUB14,400, in 2019 - up to RUB15,400. According to him, the increase in payments should outpace inflation. The average pension will also increase due to the increase in the retirement age.
The All-Russian People’s Front, a coalition led by United Russia, has released a poll on teachers’ salaries. It finds that teachers are poorly compensated relative to the amount of work they do, and that the situation is worse than official statistics suggest. Teachers are an important constituency
RUSSIA Country Report July 2018 www.intellinews.com