In Russia, the number of poor people was calculated: an anomaly was discovered

The number of the poor in Russia in the second quarter of 2022 decreased by 2.2% – the additional June indexation of pensions and the minimum wage by 10% helped, and the payment of benefits to the poor, Rosstat said. But these figures do not cause much joy: compared to 2021, this reduction is microscopic, only 0.2 percent in the first half of the year, and the poverty line in Russia has been lower than the poverty line, in fact, the subsistence minimum for the second year already.

The other day, Rosstat published data on monitoring the level of poverty in the country for the second quarter and first half of 2022. But in order to evaluate the figures given by the statistical office, one must first remember where the poverty line is in Russia.

Until 2021, those Russians were officially considered poor whose income in monetary terms was less than the subsistence level. And the subsistence minimum is “the minimum amount of income of a citizen necessary to ensure life”, as was said and, by the way, is still said in the relevant law. It is impossible to live on less money, follows from this definition. The cost of living was determined based on the cost of the consumer basket, which included a meager list of food products, and the cost of non-food products and services, mandatory payments and fees was determined using conditional coefficients. That shameful consumer basket has long needed revision, but it was delayed and delayed. It is clear why: incomes below the subsistence level gave and give the right to social assistance from the state, and the amount of some benefits depends on this indicator. If you raise the minimum, a greater number of Russians will fall into the number of the poor, and you will have to help them …

But from 2021, the cost of living began to be calculated differently: for each next year it should be set at 44.2% of the median average per capita income for the year preceding the year of establishment. The median income is such, less and more than which 50% of the country’s population has. True, as early as last year, strongly rising inflation actually sent this rule into the basket: from January 1, 2022, the cost of living in relation to median income was supposed to increase by only 2.5%, but by a strong-willed decision it was raised by 8.6%. And this year, from June 1, unscheduled, they raised another 10%, to 13,919 rubles a month on average in the country.

At the same time, back in 2021, the government decided that the subsistence minimum would no longer be the poverty line: it was ordered to consider the cost of the consumer basket (the same one that had long been outdated in terms of content) in the fourth quarter of 2020, adjusted for accumulated inflation. Everyone with incomes below this figure is officially poor, and those with higher incomes are no longer poor. At the same time, the subsistence level still remains the boundary for separating those who are entitled to social assistance from those who are not entitled to it!

With all of the above in mind, let’s look at the latest figures released by Rosstat.

In the second quarter of 2022, the poverty line, calculated based on the consumer basket of 2020 adjusted for inflation, amounted to 13,813 rubles. 17.6 million people, or 12.1% of permanent residents of the country, had incomes below this level. This is 2.2% less than it was in the first quarter of this year!

positive statistics. But…

Compared to the second quarter of 2021, the number of poor people decreased by only 0.4%. And compared to the first half of 2021, it is 0.2% less … In millions of people, it makes no sense to compare the numbers for this and last years, because the country’s population has decreased: according to the same Rosstat, as of January 1, 2022, Russia constantly 145,478 people lived, 693 thousand less than a year earlier. In millions of people, the indicator is important only for the government, which will have to report on the implementation of the task set by the president to reduce the number of poor people by 2030 by half compared to 2017. This means that the number of the poor must be reduced by 9.6 million people, Social Deputy Prime Minister Tatyana Golikova said at the end of 2020. (Achievement of the set goal can, of course, be helped by a further reduction in the population, but it would not be desirable.)

According to Rosstat, the reduction in the number of officially poor in the second quarter was achieved at the cost of cash injections from the budget. In the second quarter of this year, compared to the first quarter, the share of social payments in the structure of the population’s cash income increased by 1.2%, that is, by more than 948 billion rubles. From April 1, a monthly cash payment to the poor for children aged 8 to 17 was introduced, which was received by about 2.5 million families. From June 1, 2022, after indexing by 10% of the subsistence minimum, the benefits dependent on this indicator in connection with the birth of the first or second child, monthly benefits for poor women registered in early pregnancy, payments for children from 3 to 7 years old, and etc. Indexation increased the pensions of about 35 million non-working pensioners by 10%. And indexation by 10% of the minimum wage increased wages for more than 4 million workers to 15,279 rubles.

And in general, the monetary income of the population in the second quarter turned out to be 22.5% more than in the first (44,374 rubles per month), and the average nominal accrued salary in the country amounted to as much as 63,784 thousand rubles, that is, it increased compared to the first by 6% quarterly… It is interesting in which industries and sectors of the economy such a strong increase in wages was observed: for the vast majority of working Russians, the figure of 63,784 (average, we note, for the country, not for Moscow) seems to be a pipe dream.

Be that as it may, this growth in nominal cash income was brought to “no” by inflation, states Rosstat: due to rising prices in real terms, the cash income of Russians, even taking into account all indexations and payments, in the second quarter of 2022 decreased compared to the second quarter last year by 1.9%…

So, the official poor are Russians with incomes below the poverty line. Which in the second quarter of 2022 received 13,813 rubles per month on average in the country. For the able-bodied population, the poverty line was an income of 14,478 rubles per month, for pensioners – 11,028 rubles per month, and for children – 13,142 rubles per month. This is slightly lower than the living wage officially set on June 1, 2022, which is 13,919 rubles per month on average, 15,172 rubles for the working-age population, 11,970 rubles per month for pensioners and 13,501 rubles per month for children. Since many poverty benefits are paid only to those whose incomes are below the subsistence minimum, either federal or regional, it turns out that an able-bodied citizen with a cash income of 15,000 rubles a month, say, is no longer poor, but has the right to social assistance.

To what extent is the current methodology for determining the poverty line adequate to reality? Economist Alexander Safonov (Financial University under the Government of the Russian Federation) answered “MK” as follows: “Rosstat operates with an official methodology and, assessing the level of poverty, it cannot go beyond it. Attention should be paid to another fact – the actual consumption. According to, for example, Romir (research center – “MK”), over 12 months, nominal weekly household spending increased by only 1.3%, which, with inflation of 14%, means a drop in real incomes.

And what will happen to the level of poverty by the end of the year – taking into account the economic crisis, sanctions and growing uncertainty? “How much poverty will decrease by the end of the year depends on the level of unemployment and inflation. I think that it will remain in the current parameters,” the expert believes.