Rosstat recorded the lowest level of poverty in the entire history of observations in 2022

The number of citizens with incomes below the poverty line in 2022 amounted to 15.3 million people, or 10.5%, follows from Rosstat data. This is the minimum level of poverty in the entire history of observation (conducted since 1992). Previously, the minimum figures were recorded in 2012, when there were 15.4 million low-income citizens in the country (10.7% of the total population).

The poverty line in 2022 was 13,545 rubles. Until 2021, the subsistence minimum (PM) was used as a criterion, based on the cost of the consumer basket at the current moment. Later, it began to be calculated as 44.2% of the value of the median per capita income for the year preceding the year in which the SM value was established.

In the fourth quarter of 2022, the poverty line was 13,762 rubles. There were 11.5 million Russians receiving incomes below this bar, which is 7.9% of the country’s inhabitants. In relation to the same period of the previous year, the indicator decreased by 800,000 people (0.6%). Compared to Q3 2022, the number of low-income citizens decreased by 3.7 million people (2.6%).

One of the main drivers of the decline in the number of low-income Russians was the increase in social benefits, according to a commentary from Rosstat. In the fourth quarter of 2022, 4.7 trillion rubles were allocated for social payments. Compared to the same period in 2021, the indicator increased by RUB 542.0 billion. (13.1%). In addition, targeted targeted state support for various groups of low-income citizens contributed to the reduction of poverty, the agency notes. According to Rosstat, more than 3 million families with children aged 3 to 7 and 3.7 million families with children aged 8 to 17 received monthly cash payments. The increase in wages and average wages also helped to reduce the number of those in need, follows from the commentary. The average accrued wages in Q4 2022 in nominal terms amounted to RUB 71,377, an increase of 12.7% compared to the same period in 2021.

According to Rosstat, average per capita nominal cash income increased by 12.4% in 2022, to RUB 45,272. At the same time, real disposable cash income of the population (adjusted for inflation and excluding mandatory payments) decreased by 1.0%. Among the reasons are high inflation, as well as the effect of a high base in 2021, when recovery growth was recorded in most industries after the COVID-19 pandemic, the statistical office said in an explanation.

The average monthly accrued wages in nominal terms also showed a positive trend last year. Compared to 2021, it increased by 12.6% to RUB 64,191. The Ministry of Economy predicts that in 2023 the real wages of Russians will increase by 2.6%, and real disposable income by 1.6%.

Benefited by low-income groups

The reduction in poverty is primarily due to the colossal cash injections into the sphere of social payments, says Lilia Ovcharova, director of the Institute for Social Policy at the National Research University Higher School of Economics. We are talking about a single allowance for families with children – its targeting is 100%, that is, it is the needy citizens who receive it, Ovcharova explained. Thanks to this, low-income citizens have become a driver of consumer demand, the expert adds.

“The second reason [положительной динамики] — unscheduled indexation of the minimum wage (minimum wage) and pensions by 10% in 2022. In addition, in the public sector, wages grew in real terms, and the share of state employees among the low-income is higher than among other categories of the population. That is, their salaries were better protected, ”explained Ovcharova.

The situation, in addition to the increased volume of social payments and indexation of the minimum wage, was affected by the shortage of personnel in the labor market, added Vice-Rector of the Financial University under the government Alexander Safonov. According to him, this led to an increase in wages. “It is important to understand that not everyone’s salary has increased. There are industries that, unfortunately, are in a difficult situation – for example, the service sector. It was the low-income groups that benefited the most, because they were primarily affected by the increase in the minimum wage and the indexation of social benefits,” Safonov explained.

In addition, the picture was changed by payments to the families of the mobilized – among them there are many representatives of the poor, said Oleg Buklemishev, Associate Professor of the Department of Macroeconomic Policy and Strategic Management. Now, after the indexation of the minimum wage and pensions, the incomes of certain categories of the population have caught up with inflation, he added. However, without further indexation, they will fall, since “the technology for indexing pensions and social benefits is a technology for compensating for inflation,” he said.

To fight poverty, it is necessary to increase the incomes of the “basic middle class” – teachers, doctors, engineers, Ovcharova notes. “Today, such a class of workers as doctors and teachers receive very low wages compared to workers with the same qualifications in countries comparable to us in terms of GDP per capita. If the government is committed to social sustainability, then raising the wages of the basic middle class is the task that will help fight poverty,” she said.