Tag Archives: wages

“Russia: A rich country full of poor people”

Leave a reply

The quote is from my book, but I wanted to write a bit more here about inequality in Russia because it is often underplayed and misunderstood. Scroll to the end if you just want the ‘news’ about the statistical manipulation of inequality statistics for political reasons.

First though, why care about inequality (specifically, wage differences) at all? High wage people tend to spend a lot less of their incomes. This money-wealth ‘leaves’ the real economy or contributes to asset inflation – notoriously, real estate prices that are now many multiples of average wages in most developed countries. Russia is no exception. Moscow apartment prices are eye-watering, even for those on ‘decent’ salaries. Being in the top 2% of earners nationally, inherited or gifted wealth are the only ways of getting access to real estate ownership in the (greater) city centre. In that sense, Moscow is not very different from Greater London or Manhattan. Wage inequality directly leads to wealth inequality. The poorest are unable to accrue even enough wealth to stave off emergencies, and the richest are unable to recirculate it in society.

One way of measuring wage inequality is the Gini coefficient. Lower means less inequality. Ginis go up and down over time, and Russia’s famously went up after 1991. For every sustained 1% increase in the Gini, there’s a 0.3% increase in inflation – a persistent scourge for Russian citizens’ sense of well-being. In 2024, the Gini for where I work, Denmark, was 0.29. For the UK it was 0.33. For the USA, 0.49. For Brazil, 0.50. Russia sits around 0.40. It’s a national priority for the Russian government to get the Gini falling into the 0.30s. It is a revealing policy objective that shows elites believe Russia has more in common with Europe (and a welfare state) than the US or middle-income countries like Brazil. But wage inequality in Russia sits at a level 25% higher than most Western European countries even as Russia continues with failed policies of low public investment and almost no consistent policy-led redistribution or progressive taxation.

Then there’s the global trends. I was reminded of Branko Milanovic’s contribution to this when he remarked the other day that one of the problems with tackling inequality is that income distribution is not something mainstream economists really care about even though it is obvious that it affects economic growth. This is very true of Russia – high hydrocarbon incomes have not been redistributed much at all, hence the high Gini. As a result, now that the ‘punchbowl’ has been taken away and the country faces a stagflationary crisis not seen for 35 years, the ‘real’ rate of economic growth is shown to be close to zero. One of the reasons for low growth is that the average Russian has few savings or economic resources.

Milanovic became famous for his research that showed that despite global inequality falling (between-country inequality), the emergence of a middle-class in China would likely increase inequality there. Furthermore, in developed countries the reductions seen in inequality thanks to post-war social democracy were – by the 2000s – going into reverse: absolute gains in income went mostly to the richest 5% of the world after the Cold War ended. It is a ‘novel’ situation that while global inequality falls, we ‘feel’ the world is more unequal than ever because within countries inequality is generally rising and becoming more visible. Middle-income countries like Russia are important because they show us what it will be like to live in a world with a shrinking middle-class (spoiler – it’s not good). This is the sharp end of the social grievances stick in a country like Russia.

Now, I’ve been banging my scholarly head against a brick wall trying to emphasize why social inequality in Russia should matter to people interested in politics for a long time. This is not a topic many pundits or scholars think is important. One of the main conclusions of my recent book is that political ressentiment in Russia is driven as much by the frankly traumatizing experience of going from low inequality to high inequality overnight in the early 1990s, as it is to do with the fashionable explanation that geopolitical ‘resentment’ animates people. When a ‘political opening’ comes, as it must surely soon do, then the gulf between the haves and have-nots will feature somehow and a smart political operator may well exploit it.

It’s nice to feel vindicated then, when I recently found two pieces outlining how wage inequality is being downplayed and statistically manipulated in Russia. For me this is personal; whenever I present my work, there’s invariably a Russian person in the audience from a privileged background who flat out denies that inequality is ‘really that high’ in Russia. Or often they say that it’s a good thing. They necessarily say it exactly like that, but often it’s along the lines that either I’m being lied to when I say how little my interlocutors earn, or that ‘these people’ have significant hidden forms of income, alongside their earnings (which is not really true – but that’s another story: spoiler – there’s good reason to believe than money wages only get a 10-15% boost by hidden incomes).

Statistical manipulation of average wage rates is now widely understood

The first piece confirmed that, as long suspected, the average wage in Russia is distorted by the few with very high wages. We already knew this, but many ignored it for political reasons. Now an analysis conducted in Russia shows that by excluding outliers, the average wage is a much lower 60,000 rb a month ($800) and not 75,000 ($1000) – the figure used by the state statistics agency Rosstat. Yes, in Moscow to earn three times this sum is ‘average’, for the city ($2230). But Russia is regionally very unbalanced on pretty much any indicator you’d care to think of. The bottom line – according to the same analysis – is that only 17 million people (out of country of 143 million) have access to incomes more than equivalent to $1333 (or £1000) a month, before tax. And if we shift the picture from ‘average’ to median – the middle point of incomes, then we get an even more sobering figure: in 2024 the median wage was 47,000 rb ($630) – 26% lower than the statistical average. Officially, wages are expected to continue to rise above the rate of inflation in 2026. But that’s just officially.

The second piece of interest was from the analytical project Esli Byt Tochnym ‘if we’re going to be precise’ . It drew attention to how Rosstat recently started publishing internationally comparative inequality measures again for Russia but then abruptly deleted them from its website. These stats showed that Russian inequality had risen back to 0.422 after a falling trend for many years. This figure is a ‘return’ to 2007 inequality levels. And those levels, by any measure, were high given the quantity and quality of human development, industrialization, social and other infrastructures available in Russia to provide dignified lives and incomes to the majority. In contrast to the dominant narrative even in the West, the rising Gini is useful because it serves as a counternarrative to the one that says ordinary people have been beneficiaries on aggregate from the war economy spending.

On the contrary, inequality has increased in every year of the war according to these figures. Shares of income also tend towards record inequalities in the 21st century– around 47% of all income is captured by the top 20% (in the USA it’s 52%), the top 10% capture 30% of incomes in Russia. The poorest 20% get 5% of the pie (in the USA it’s 3%). Overall then, we can draw the conclusion that 2022 was a watershed year – the end of a trend towards lessening economic differences and a return to earlier trends, albeit compensated by the fact that absolute poverty is lower (well, maybe).

Of course, rising inequality sometimes means that everyone is getting better off, but the rich are winning out more than the rest. What’s also nice about Esli Byt Tochnym is that in their Telegram account they also provide decile breakdown of incomes – the fifth 50% to 60%) get 55,157 roubles ($730). A pretax income of 339,054 ($4520) would put you in the top 1% of wage earners. EBT is useful to draw attention to statistical manipulate for ideological and political reasons – they also previously reported on the covering up by Rosstat of the real levels of poverty in the country. These poverty rates may be relative (by any measure outside Africa and a few places in Asia), but they are still high for such a well-endowed country. Once again, many people are in denial about this because of the political implications. And they continue such fictions because their audience is from the same privileged class as they are and do not know any better.

Coda: one materialist critique of Gini, and one anthropological intervention

Another topic entirely is the problem with using wage differentials as an expression of ‘inequality’. As Oleg Komolov said the other day in his own commentary to the recent statistical adjustments, it may well be that low wages in Khabarovsk buy more than median Moscow wages in Moscow – if you follow me. But the Gini itself understates the whopping inequality when it comes to accessing the services that are needed for basic human flourishing such as education, medicine and infrastructure. On these ‘measures’, a life outside the metropole looks much more starkly unequal than one inside it.

Then, finally there’s anthropology. On the basis of work done in Russia it has tried to rethink inequality by foregrounding its political and discursive contours rather than treating it as an outcome of economic or distributive injustice. Caroline Humphrey wrote about this at the tail ends of the 1990s – a decade of massive apportionment of misery and riches seemingly at random in Russia. For Humphrey, the Russian ‘case’ allows us to sensitise ourselves to how inequality emerges not only from material disparities but also from political anxieties: about the integrity, unity, and governability of social groups.  It calls back to some of her earlier work about institutionalism in Russia being about incorporation and the creation of ‘insider’-‘outsider’ status. In this framework, inequality is relational and fluid, rooted in historically variable discourses that construct categories of the dispossessed. This explains partly why material misfortune so often is accompanied by ‘social death’ in Russia – in a cycle that compounds misery. There’s no more space here to go into this, but if the Russian ’regime’ gets reconstituted, this less visible sense of inequality may become more salient that the purely economic one.

Everyday Politics in Russia 2: How do we know the ‘average wage’? Plus: the bits of the book that engage with social movement theories

3 Replies

In the last post I mentioned….polsci. I don’t talk about much contemporary political or sociological theory in the book, but I am interested in a moment from early 2000s where Douglas McAdam and his co-authors Tarrow and Tilly appear to countenance a ‘poststructuralist’ way of looking at social movements

Following Tilly et al, I pick up on the call from more than 20 years ago by these authors to better integrate cognitive, relational and environmental factors pertaining to the submerged reality of political movements and networks. To reiterate – we’re looking at sums of effects of the flattened public sphere by criminalizing protest, the beheading of movements’ charismatic leaders. This, I argue, forced on activists a more democratic and grassroots focus; Putin’s 2020s Russia produces a new and in some respects dynamic activism, as much as activists’ ideological commitment or material resources do. This is the conundrum of social movement studies – the gap between foundations of action and action itself – how does a ‘process’ of activism occur or not occur in the presence of network and commitment? Again, this is something I started exploring in a direct response to Tilly’s work in my previous co-edited book. In this new book, I look more broadly at how much in common anti-war activism has with labour organizing, ecology work, and even grassroots patriotic activism in support of Russian soldiers. What I find are related processes of dispersed, nomadic activism. But there is a long gestation and formation of political positions that then informs action. Once again, that is the value of a ‘submerged organizational level of analysis’ (Tilly) – and one I aim to provide.

I follow a detailed process-tracing of anti-war stickering in 2022 in the case of ‘Polina’ in my book. To do something like this, most researchers need to start with the formative experience of 2011-12 around Bolotnaia, but also acknowledge the ambivalence of that experience. It has an affective hardening effect against Putinism, but also set up tensions around the question of electoral v. other politics, committees v. charismatic leaders, the centre v. periphery, talk v. action. It would be culturally reductive to say Bolotnaia radicalizes, or sets in motion a series of learning points in a predictable way that results in where we are now. Just to take the composite characters again from my book: ‘Polina’ becomes attuned to a genre of public protest opposition despite Bolotnaia’s failure, and despite the inflation in repression after 2018. Indeed, she goes against the advice of her allies among Navalny organizers when she stages a spectacular protest with others about Shiyes and gets her second arrest. At the same time, the stratum she ‘represents’ learns a lot from Navalny’s electoral strategy and how it involved regional capacity building: essentially, political education in organizing. But this for Polina occurs in parallel with her learning from socialist labour union work that’s mainly ‘indigenous’ to her locale.

But contrary to what you might expect, this is not taking place slowly, or gradually because it is occurring at the same time as an explosion of private (not public) social networking capacity. This means temporary alliances are possible between regional Navalnyites and ecologists and labour/socialist organizers. And these alliances are horizontal and nothing to do with the actual leaders of the Navalny movement. Indeed, it was funny when I interviewed a prominent person formerly connected to FBK and they had no idea of the capacity they had really built regionally because it was invisible to their own, centre-focussed and civic-electoral political aims.

In a sense, this process is frustratingly fuzzy to the social scientist; it remains very contingent, situational, refutes to a degree simplistic findings about the driving forces of identity politics or rights-based discourses for the emergence of social movements.  In that sense, my argument is not novel. Activism is opportunistic and, indeed, in a marginalized positioning. At the same time, the relative field of possible causes/actions/political orientations with which to align or ally expands in a noticeable ecumenical and pluralist manner – even to a degree which people are uncomfortable with in reality – like in joining members of the (regional) Communist Party in actions despite their prior mistrust and continuing unhappiness with the leadership of that party. As a result, there’s certainly merit in thinking about activism in Russia as an example of dispersed, pluralistic, and flexible political contestation.

But there’s also merit in thinking about how to put the ‘social’ back into the idea of social movements. Alain Touraine in the early 1990s remarked that post-social movements were heralded by consumerism and individualism and the abandonment of grand political aims based on class-consciousness. Movements base on identities threatened to pacify ‘social’ claims like a greater share of national wealth. But now we can think of the socialness of activism in a different way. What was interesting to me is how the actual differences and relations in communities of action are naturally visible and reflected upon by participants. And this carries over into relations between activists – so it was telling that while Polina didn’t like Navalny’s politics (too metroliberal and cryptonationalist) – she recognized the importance of her relation to the former Navalny organisers. At the same time, she didn’t like the anticapitalist socialist position of some unionists, but admired their actionist stance and picketing tactics. So, in a sense what I’m arguing for here is that the ‘social’ after the virtualization of opposition remains an important part of political engagement. The social as solidary and mutual learning still serves as glue and trumps political differences. Of course, the extreme turn of Putinism only helps this.

However, it’s also not that simple as having a common enemy. The war has forced people to confront the necessity of engaging with, or just listening to, those who support minimizing the damage to the Russian Federation while still broadly opposing Putinism. And in the last part of the book, I show this drama play out. Died-in-the-wool anti-war people are forced to acknowledge the legitimacy of activists who want to protect Russian soldiers even while those don’t support the actual war aims. Just a few days ago there was the case of a prominent anti-Putin socialist activist who was killed fighting in Ukraine. Oppositional activism is really only a small part of the book, but the tectonic social impulse that allows me to legitimately compare anti-war and patriotic activists is a recurring theme that provides the master theory underpinning all my ethnography. I turn to that in the following post.

Coda: What’s in the news? I read this article today about how only 10% of men in Russia admitted that they would feel awkward if a woman earned more than them. A linked article notes that the general gender pay gap in Russia is 43% (average salary for men 1000 USD and for women 720 USD). In turn this reminded me of a chart that Maria Snegovaya and Janis Kluge posted on social media showing a strong uptick in ‘real wages’ since the war began. Snegovaya sees this as support for the idea that the ‘population is loyal’. Kluge wrote that it shows why the war has been a ‘golden era’ for many. People assume that when I criticize these stats I am saying that they are ‘faked’. I’m not saying that, though I do think out of desperation at the poor quality of data they get that people in Rosstat have to process it a lot and that this alone is ‘dodgy’ – but something all statistical agencies do. What I’m really saying is: how reliable are the sources of this data in the first place when we know that what people actually get paid in Russia is one of the most notoriously opaque and painful data points in any statistics.

Anyway, to illustrate how silly it is to rely on one dataset like this (which in the original has no explanation of source), I just posted another graph from the same source. This is ‘real incomes’ (red line) and real disposable incomes (blue line). Details aside of the difference between incomes and wages, what’s perhaps most remarkable is the incredible stagnation of incomes between 2014 and 2023.

Axes of evil, or just normal chart crimes? The discussion in Russian to M. Snegovaya’s post is interesting. As is a follow-up post by Nikolai Kul’baka. He gives details on how wage data is collected from firms. As one can surmise, such data is not collected from small and most medium businesses. State enterprises we know do not reliably report salaries. A few v. high salaries distorts the average. The methods of calculation have changed a lot. Kul’baka: ‘there’s no major rise in salaries in Russia’. He also notes that protest frequency and changes in wages have no statistical correlation, something Sam Greene and Graeme Robertson explored many years ago in this excellent article.