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Tuesday, March 13, 2018

The report of the HSE: the Russians began to earn less than the Chinese

The crisis that began with the fall of oil prices and the announcement of Russia to Western sanctions, finally took us by the throat. Since 2013, the average salaries in our country fell by almost half. And although in the CIS we are still in first place, we comes on the heels of Kazakhstan and Belarus.

photo: Gennady Cherkasov

According to the Higher school of Economics (HSE), in April those who assessed financial situation of their families as bad or very bad, there were 21%. And, although compared to March, this figure has not changed, that at first glance, well — there is some stability. But because the situation is breath-taking. Every fifth in the country actually lives below the poverty line, not to say the Rosstat, which estimates that this figure is only 14%.

Moreover, on the brink of survival, according to the HSE, in our country is practically every tenth.

But those who are not yet suffering from famine, day by day still living worse and worse: more than 75% of respondents saved on almost everything. Hardest spending cuts touched on entertainment (48%), purchasing of clothes and shoes (47%) and food (45%).

The average salary of Russians in 2015 in dollars (nominal exchange rates) has fallen to level of Belarus and Kazakhstan. If 2013 ago our compatriots have received on average about more than $936, now — only $558.

By the way, falling wages Belarusians and Kazakhs was not as significant as in Russia. The first two years ago received $564 (now $415), the second — $717 (now $549).

Very much the plight of the people of our country can be understood by comparing the situation with the countries of Eastern and Central Europe, and even with the BRICS Nations. Thus, the average salary in the Czech Republic exceeds $1000 (previous year us $1.2 thousand), and in Hungary comes to $900 (in 2014 — more than $1 thousand). In Brazil, a similar figure is more than $650. In China, by 2015 the HSE has no data, but in 2014, there salary was $765.

These figures speak for themselves. To develop with such low wages Russia is not able, since the fall of effective demand, and thus investment in the economy.

However, there is a silver lining, according to many liberal experts – the lower the salary, the lower the cost of production. It may be of interest to investors, primarily foreign ones. But for some reason this is not happening. In Russia, the continuing decline of investment. Although, of course, the main role is played by Western sanctions (especially in the financial and technological fields), but there are other factors.

But at the exchange rate of PPP (purchasing power parity) real average monthly wages in dollars are higher not only than in Brazil($1 million), but even than China’s ($1.2 thousand)

What is PPP? This is how many goods we can buy per dollar in local currency. Of course, Russia’s financial system is tied to petrodollars. But we produce not only hydrocarbons, but also many other goods. Dollarization of our economy at the low prices for raw materials falls. It is no accident, after the collapse of the ruble over the last two years is 2-2. 5 times, inflation is not exceeded in 2015 13%.

A similar situation is observed in other countries of the world. Because of this, and at the International monetary Fund and the Organization for economic cooperation and development in evaluating the economic potential of one country or another is taken into account not so much the nominal exchange rate, as the purchasing power parity.

It seems like it is a good idea. In our country, the PPP figure is more than $1760 per month. That is, each secondary buyer, we can purchase goods and services at $558, and supposedly all of $1760. Since 2013, this amount hardly decreased.

However, PPP is a rather conventional figure. If we got really for $1760, and the crisis would not have noticed. But if you go to the store, it becomes clear to all that I want, not enough money. We need to save and stay within the same $558, but don’t count on the amount by almost three times. Therefore, the indicators that HSE leads, raise many questions to which respondents “MK” experts have not responded.

Sanctions . Chronicle of events

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