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Tuesday, October 25, 2016

The consequences of the crisis: the number of “poor” regions increased to 26

“There is no money, but you hold on!” Recent recognition of Dmitry Medvedev did not leave indifferent, perhaps, not a single Russian. The words of the Prime Minister in a matter of hours sparked outrage and jokes, which is understandable. But on the other hand, a long time no one so accurately and openly described the state of the Russian economy. However, a few days before that we were told that the recession is over in 2015. And we have not noticed. And then the bottom has been reached crisis. In other words — the idea is that domestic GDP should go up. But the meager contents of the purses of our countrymen, alas, suggests otherwise.

photo: Gennady Cherkasov

“Minimal” in pursuit of a living wage

Real disposable incomes (incomes minus the obligatory payments, corrected by consumer price index) of the population are falling literally every day. In April this year compared to the same period they decreased by 7.1%, in January—April and 4.7%.

However, lawmakers do not lose hope to return them to the level of previous years. Members believe that this could happen by increasing the minimum wage (SMIC). So, last week President Vladimir Putin signed Federal law on its increase from July 1, this year by 21% to 7.5 thousand rubles ($109, or 97,5 EUR) per month. According to the document, the increase will affect about 1 million workers. Of these, 87% are employed in state and municipal institutions, and 13% in the private sector.

However, such a measure can be called a sweet pill to swallow. According to experts interviewed by “MK”, the wallets of Russians will not be replenished. Grown up “minimal” simply “eats” inflation.

“Raising the minimum wage is 21% while the annual inflation rate of about 15-20% will not affect the well-being of citizens in a positive way, but rather the opposite. That is, the income of state employees will actually remain the same, they are simply raised to the level of inflation, — says “MK”, the first Vice-President of “OPORA Russia” Paul Segal. — While the minimum wage is still higher. Now it is approximately equal to 9.5 thousand rubles a month per person”.

But the deputies did not leave the idea to equate the minimum wage to a living wage. Parliamentarians intend to meet targets by 2020. According to the head of the Duma Committee on labor, social policy and veterans Affairs Olga batalina, the planned development of the bill.

The current size of the minimum wage (6198 rubles) is 65.5 per cent of the subsistence minimum, and about 20% of the average wage. Increase to 7500 rubles will allow to increase these figures to 80 and 23%, respectively. According to Rosstat, now wages below 7400 rubles for medium to large domestic enterprises reach 4.5% of the workforce.

According to experts, the increase in the minimum wage is unlikely to reduce poverty among our compatriots. This measure looks more like a pre-election gesture.

According to the Director of the Institute for social analysis and forecasting Ranhigs Tatiana Maleva, in the period of crisis the main purpose of socio-economic policy should be to prevent a rise in the number of Russians living below the poverty line. At the moment, in her estimation, the figure is 13.4%.

In addition, the minimum wage depends on the contributions of individual entrepreneurs and self-employed in social funds. “Their increase will lead to the elimination of part of FE and loss of jobs. Increase the minimum wage even in the more prosperous years resulted in 2-4 months to reduce formal and increasing informal employment”, — says “MK” managing partner Group of Kirikov Daniil Kirikov.

In order to reduce poverty, stimulate consumption and for political purposes to raise the minimum wage used by many state and government. So, in the UK minimum wage from April 1 will increase from 6.7 to 7.2 pounds ($10,2) per hour, and by 2020 — up to 9 pounds ($12,8).

According to Eurostat, the minimum salary in France (€1467) reaches 47.9% of the national average, in the UK (equivalent to € 1529) — 40,1%, in Latvia (370 euros) — of 44.4%.

Thus, it is planned to support the lower limit of earnings in an amount which provides a modest existence. However, there are other options. For example, the Finnish authorities consider the possibility to pay their citizens for 550 euros. In return, the population must abandon the payment of social benefits.

Through this method the government is trying to return the “professional unemployed” in the labour market.

photo: Gennady Cherkasov

Where in Russia to live well?

Indeed, the main indicator that demonstrates the level of living is the wages. A few years ago in most Russian regions, to our compatriots even after payment of obligatory payments was able to save money. These available funds they had enough to buy expensive goods like cars or better yet — housing, or go to rest abroad.

However, the crisis forced the Russians to moderate their appetites and to remember the old Soviet slogan “the economy must be economical”. So, the share of those who considers it necessary to reduce daily expenses, has reached an annual maximum of 66%. In addition, about 65% of respondents believe that now there is no need to make big expensive purchases. 87% of respondents are afraid to take loans.

“The tendency to refrain from spending, which was formed in Russia in recent time at the household level, is fixed. Because of the growing inflation already more than a third of the population spends the bulk of the funds for food and housing. As a result of “available funds” actually does not remain. It is worth noting also those who came under attack of large-scale optimization of costs of the corporate sector and at all remained without a livelihood, not to mention the repayment of loans. In other words, the situation will only get worse until, until will not resume employment will not begin reducing inflation and increasing real wages. Most likely, the negative dynamics will be observed for at least several quarters,” — says “MK” a senior analyst at GK FOREX CLUB Alena Afanasyeva.

At the end of last year the Russian average monthly families with two children after minimum spending remains 28.1 thousand rubles. This is 13% lower than a year earlier. However, there are those whose sum of “free money” above the average. And at the top of the list are mainly industrialized regions rich in natural resources, below — the regions with small industry.

So, the leaders in terms of life, as before, Yamalo-Nenets Autonomous Okrug (YANAO) and Chukotka. In these regions, the average monthly income of the family with two children reaches to 91.2 and 89.9 thousand rubles, respectively. In third place is Moscow. On average, Metropolitan families with two children after the payment of “communal”, heat and so on is about 70 thousand rubles.

In three Russian regions — the Khanty-Mansi Autonomous district — Yugra, Nenets Autonomous district and the Magadan region — the family’s cash balance exceeds 50 thousand rubles.

The same poor unit of society live in the Pskov region. Local hands is only 570 rubles. Second place among the outsiders is Dagestan, where families have only 2,4 thousand rubles, which is 75% lower than last year. The third line from the end is Ivanovskaya oblast ‘ from 3 thousand rubles (a decrease of 64% compared to the end of 2014).

According to experts, the geography of poverty in Russia is growing every single day. The number of regions in which a family of two working parents and two dependent children has less than 10 thousand rubles, by the end of 2015 rose to 26 — from six a year earlier.

For comparison, the well-being of families with one child, according to Rosstat, much higher. Ten subjects after all the minimum payments is more than 50 thousand rubles, and in no region no free cash balance of less than 10 thousand rubles. The leader in this case is Chukotka. Family here with one child may have 106,8 thousand rubles. In second place is the Yamal-Nenets Autonomous Okrug from 106.7 thousand. Closes the top three of the Nenets Autonomous Okrug (83.2 per thousand). Pskov family and in this version is harder all in Russia. If you have only one child they still have 10.6 thousand rubles.

How to survive during the crisis?

Incomes are falling, wages are not indexed, inflation accelerates. But like it or not, and to adapt to these conditions have. As experts suggest, the crisis could and should be earning. Get at least well-known philanthropist-millionaire George Soros. His fortune he made in the period of chaos in financial markets. The devaluation of the British pound brought Soros, according to various estimates, $1-1,5 billion Ordinary Russians for an American financier, of course, can not keep up. As practice shows, unprofessional market players to hit the jackpot fails. On the contrary, they run the risk of getting bogged down in debt as in silks. Therefore, experts recommend people not to abandon the additional earnings in the form of part-time work. Money will not be superfluous.

If you prefer protection, then you need to get rid of debt, if any, and also to pick up what you someone once lent. Then this opportunity might not present itself.

In addition, you should postpone major purchases, start saving and upgrade your resume. Yes, Yes — summary. It is not excluded that you have to look for a job. Cuts is already sweeping the country.

To the question of currency. At a time when the ruble storm, citizens often wonder what to keep their savings in dollars, euros or rubles? But nothing new here have not yet invented — do not keep all your eggs in one basket. Divide the amount in half and buy half the “green” or Euro, and the other half rely on our “hardwood”.

You can also traditionally refer to Bank deposits. What kind of a credit institution to entrust their money to you, but in times of crisis is largely to give preference to financial institutions that participate in the Deposit insurance system.

Financial crisis. Chronicle of events

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