A record increase in wages by 10.4% raised questions from experts: “Strange figure”

It’s not just the low base effect

Enchanting growth in annual terms was shown by the real salaries of Russians. At the end of April, according to Rosstat, it amounted to plus 10.4% – this is not some 2.7% a month earlier. There are some questions about this statistic. Rosstat refers to the effect of the low base in April last year, when inflation was an order of magnitude higher than today. However, the impact of this factor on the situation is not so great as to completely block other problems. For example, the reduction of wage fund by employers due to financial problems.

Recall that real wages are the average monthly accrued wages, adjusted for inflation. In April 2023, the accrued salary of employees of organizations amounted to 71,204 rubles and increased by 13% compared to the same period last year. As for the consumer price index, it was 17.8% in April 2022, and 3.3% a year later. Accordingly, in April last year, there was a peak in the decline in real wages – minus 7.2% (which has not happened since December 2015). That is, roughly speaking, the calculation is as follows: in April 2022, you were credited with 60 thousand rubles, statisticians subtracted 17.8% from this figure and got a “real” result: about 50 thousand. A year later, you were again credited with the same 60 thousand, but this time they deducted 3.3% already – they got “real” 58 thousand. Here you have an increase in the indicator by more than 10 percent. Needless to say, a low base is a great thing, an undeniable demonstrative tool for statisticians in its irrefutability.

However, there is a difference between the world of official figures and the reality in which processes take place – deep, uncontrolled by the state and inseparable from very many macroeconomic circumstances. For example, if we take the private sector, Russian companies in many segments of retail trade and services record a continuing decline in turnover in the spring of 2022 – from a few percent to tens. In particular, we are talking about car washes and car services, hairdressers and beauty salons, private clinics, hotels, restaurants. At the same time, business costs are growing, which forces employers to unplannedly cut investments in the wage fund (payroll), not pay bonuses and bonuses to staff, and transfer people to a shorter working day or week.

In the private sector, if there is no revenue, there is no salary. With state employees, who account for 34% of all real incomes of the population, the situation is somewhat more complicated. As a rule, in state organizations, base rates remain unchanged. But, firstly, these rates are often low, and secondly, no one prevents the management from adjusting the amount of allowances and bonuses, which make up a significant share of people’s income. And if earlier the state regularly carried out some kind of massive indexation of salaries for state employees, now nothing is heard about them. Which is not surprising: since last year, our budget has been in deficit and there is no “extra” money in it.

“The 10.4% increase in April announced by Rosstat is a very strange figure, I can’t find a clear explanation for it,” says Pavel Kudyukin, a member of the Council of the Russian Labor Confederation. – The low base effect is wonderful, but according to my observations, according to reports from individual enterprises, employers are actively “chemizing” with salary schemes, cutting incentive payments. Yes, in a number of industries related, in particular, to the state defense order and in need of attracting additional personnel, salaries have indeed increased. However, this effect is unlikely to be transmitted to the entire economy.”

As for the military personnel who are in the NVO zone, there are only a few hundred thousand of them. Yes, their salaries are large by Russian standards, but almost 70 million workers are officially involved in our labor market, Kudyukin recalls.

“The low base effect (and high inflation in April 2022) is far from 100% responsible for the situation,” says Sergey Smirnov, a leading researcher at INION RAS. – Let’s look at the federal budget expenditures, which in the first months of the year were huge, reaching 95-97 billion rubles a day. Among other things, this money was used for various kinds of economic projects, for payments under contracts to participants in the SVO, for raising the wages of employees of defense enterprises. This factor should not be discounted. In the future, the dynamics of growth in real wages will change, take on a more familiar form, since in June the daily expenses of the treasury were halved, to about 47 billion rubles. But at the same time, employers will not deviate from their current tactics of optimizing the payroll: in conditions of economic uncertainty, they need to have a solid financial nest in case of various kinds of force majeure.