Poverty picked up recruits – Newspaper Kommersant No. 192 (7393) of 10/17/2022

The CMASF published its assessments of changes in the well-being of citizens, indicating that the current crisis increases the risks of growing poverty – both absolute and relative (the inability to maintain consumption standards, despite the fact that formally incomes are above the poverty line). The center also records a decline in the size of the middle class, its incomes and consumption standards, as well as the risks of its “erosion towards the poorer segments of the population” – which increases differentiation and inequality in society. The latter is a serious problem, “because it is the middle class that ‘cements’ society,” the center’s analysts note.

Although in 2021 real wages (the bulk of income) grew in almost all sectors except health care, social services (due to compression of covid payments) and administrative activities, only in four sectors (vocational science, IT, mining and finance) did nominal wages exceed than six times the minimum wage. “Despite the recovery of incomes and wages in a number of industries, the situation for the employed in terms of the risks of being below the poverty line or in a state of “pre-poverty” is quite acute,” analysts say. In the hotel and restaurant business, construction and trade, although they recovered quickly, the ratio of wages and minimum wages was lower (2.3, 3.7, 3.5, respectively) than the average (4.1). In the second quarter of 2022, against the backdrop of “adjusting” to the crisis due to the traditional reduction in payments and part-time employment instead of downsizing, wages decreased in half of the sectors (most among state employees). It has noticeably grown only in IT, and the number of sectors where the ratio of wages to the minimum wage was less than four has noticeably increased (including due to real estate and administrative activities).

There is also a risk of a noticeable deterioration in well-being among pensioners. Taking into account “poor inflation” (their consumer basket is dominated by goods whose prices have risen more than the prices at which inflation is calculated), real pensions in 2022 will be noticeably lower than a year ago, even with indexation (see graph). However, the CMASF concludes that the state policy is aimed at supporting the poor – and do not expect a “catastrophic increase in the level of poverty.”

Artem Chugunov