The expert called the factors that reduce the income of citizens: “What kind of economy, such and earnings”

The real wages of Russians have been declining for the sixth month in a row: in September, the decline was 1.4% on an annualized basis, and in the third quarter – 1.9%, according to Rosstat. This trend is clearly long-term, stable and will definitely not go anywhere in the coming year, no matter what high officials say. Everything is extremely simple: what is the economy in the country, such are the salaries.

Recall that we are talking about the average accrued wages adjusted for inflation. In April 2022, it decreased by 7.2%, which was the maximum since October 2015 (then it was minus 8.5%). This happened against the backdrop of Western sanctions and the acceleration of annual consumer prices to 17.8%. The monthly dynamics of real wages looks like this: May – minus 6.1%, June and July – minus 3.2%, August – minus 1.2%. By the way, in April 2020, during the period of the most severe coronavirus restrictions, the drop was only 2%.

As for inflation, Rosstat recorded it at 17.1% in May, 15.9% in June and July, 14.3% in August, 13.6% in September, and 12.6% in October.

With nominal (excluding inflation) accrued salaries of employees of organizations, the picture is completely different. In September, they increased by 12.1% compared to the corresponding period of 2021, amounting to 61.9 thousand rubles. And in the third quarter – by 12.2% year on year. According to the basic version of the forecast of the Ministry of Economic Development, at the end of the current year, real wages will decrease by 2%, but in 2023-2025 they will grow by 2.6%, 2.9% and 2.8%, respectively.

Meanwhile, trying to look into the future in conditions of total uncertainty and the regime of manual control of the economy is a deliberately disastrous business. There is no doubt that the reality will be very different from departmental forecast indicators. Due to geopolitical confrontation and sanctions, the current crisis in Russia can last indefinitely, and scenarios for its development are fraught with any surprises. In general, the topic of wages is inseparable from the macroeconomic context. If we take private business, the retail trade and services sector, during the period from March to November, the turnover of many companies decreased by tens of percent. Dramatically fell revenues from car washes and car services, hairdressers, fitness centers and beauty salons, hotels and restaurants.

At the same time, the companies’ expenses and production costs increased by the same tens of percent; business is forced to minimize investments in the wage fund, cut bonuses and bonuses, transfer staff to a shorter working day or week. If there is no income, then there is no way to index people’s salaries. No time for fat … And the situation is definitely not getting better, because there are no prerequisites for this.

“When the economy is in order, incomes grow in almost all sectors, which makes it possible not only to provide workers with a decent salary, but also to regularly adjust it upwards in line with consumer prices,” says Igor Nikolaev, chief researcher at the Institute of Economics of the Russian Academy of Sciences. – Now it is increasingly going into the red, although not at such an alarming rate as it was seen in March-April. The second decisive factor is inflation, which, although slowing down, remains significant. 12.6% is a lot.”

Curiously, argues Nikolaev, that the state predicts wage growth in 2023-2025, although there are no objective grounds for such optimism. The expert believes that next year GDP will fall not by 0.8%, as the Ministry of Economic Development believes, but by at least two or three percent (the forecast for a fall for this year is 2.9%). And the first quarter will be especially disastrous, given the effect of the high base of January-February 2022. In general, the economy will continue to gradually degrade, at a rate comparable to the current one. The official inflation forecast for 2023 of 5.5% also looks clearly underestimated, although Nikolayev hopes prices can be kept in single digits. The state will certainly raise the general indicators of wages by indexing state employees, but the real sector does not have such an opportunity, the economist notes. The negative dynamics will continue, as it has a stable character due to macroeconomic factors. As well as the situation with real disposable income, which has been continuously falling since the end of 2013.