Real incomes of a population are a combination of material resources received by workers for their labor or other type of activity. Most often this is cash revenue. Moreover, it is important exactly how much real goods can be purchased with the money received. Cash (nominal) income is the amount of money that comes to the employee’s account per time unit and is the result of his labor activity. As a time interval, 1 month is most often chosen.
Types of income
There are 3 types of income: nominal, disposable and real. Nominal is simply the ruble value of wages. Disposable is the amount of money that a person remains after mandatory payments. It can be used as you wish. The real income of the population is the amount of goods that can be purchased for the amount of money earned. It is a general indicator of living standards.
Sources of real disposable income:
- Salary, which can be piece-rate or time-based.
- Other cash payments to employees: remuneration, bonuses, bonuses, etc.
- Social payments.
- Funds from private entrepreneurship.
- Income from leasing private property.
- Revenues from operations with foreign currency, the rate of which is constantly changing.
- Other types of income.
Salary (including hidden) accounts for 65 percent of all Russian income. Social payments give another 20. Entrepreneurship provides about 8% of total income, operations with personal property - 6%, and other types of income - 2%. This situation was observed in 2017.
The values of income, even in average terms, are quite small in Russia. In 2016, their level (excluding mandatory payments) amounted to 21365 rubles. However, in the 90s they were even lower.
The average pension in 2017 was 13, 304 rubles. And the total value of cash income for the year was estimated at 55 trillion rubles.
Modern income history
Most often, income means real income of the population. Their level over the past decades has been changing all the time. In the Soviet period (80s) it was relatively close to the modern one, but in the very beginning of the 90s it fell sharply. This was due to an unsuccessful reform of the economy and government, an increase in capital outflows and theft. During the 90s, the average income level was half that of the Soviet period. However, he was not permanent. The lowest indicator was noted in 1999, and the second (less deep) minimum - in 1992.
For some people, such a sharp drop has put them on the brink of survival. However, lower salaries were not the only problem. The quality of life as a whole has sharply worsened. Cheap imported goods poured into the market, and working in a specialty has become much more difficult. Many experts were forced to sweep the streets or trade.
Other social problems of the 90s
Moreover, the average value of real incomes of the Russian population does not fully reflect the magnitude of the developed crisis. Due to the enrichment of the minority, the income of the majority, obviously, fell more significantly than the average. According to some reports, during the crisis of the 90s, salaries decreased by about 3 times. A particularly sharp drop occurred in 1995 and 1998.
In addition to reducing the size of payments, the total wage arrears sharply increased. In mid-1997, it amounted to 11.4 trillion rubles, and taking into account the military - up to 20 trillion rubles. If we include private employers' debt in this data, then the figure is about 50 trillion rubles.
Situation in the 2000s
Since 1999, there has been a steady increase in real incomes of the population, which has led to a decrease in the poverty level from 29 to 11%. Salary arrears declined sharply. At the beginning of the 2nd decade of the 21st century, the average real disposable income was already higher than in the 80s of the 20th century. Improving the quality of life affected the improvement of the social well-being of Russians and the growth of average life expectancy.
Situation in recent years
The decline in real disposable cash incomes of the population resumed as hydrocarbon prices fell in 2014–16. Moreover, the impact of sanctions, if any, was rather modest. In fact, oil and gas exports continued to increase, and no bans were imposed on it at all. However, the counter-sanctions adopted by the Russian authorities could play a significant role.
The most dramatic decline in revenue was in 2016. In 2017, despite the restoration of oil prices and prices for other types of export raw materials to the level of $ 75 per barrel, revenues continued to decline (by 1.7% per year). At the same time, its pace slowed significantly. At the same time, according to forecasts, there should have been a slight increase (by 1.2%).
Only in January 2017, due to the payment of a lump-sum pension, the income of Russians grew by 8.8%. In monetary terms, this amounted to 5000 rubles. persons of retirement age. It was a kind of compensation for insufficient indexation of pensions in 2016. This case was the first in the past 26 months of revenue decline and so far the last.
At the same time, there was an increase in nominally real incomes of the population, i.e., wages (on average, 7% higher than in 2016). The average salary, according to the Federal State Statistics Service, amounted to 39, 085 rubles. However, in real terms, growth was also noted - by 3.4%. But this growth was extremely uneven across regions and sectors. Therefore, many still complain about the lack of indexation, and even about a decrease in nominal wages.
How do economists explain the situation?
The drop in income amid rising wages is due to lower profits in the small business sector, due to lower purchasing power of the population. The so-called hidden salary is also reduced. All these reductions are more tangible than the growth of traditional state salaries, which gives a roll towards a decrease in real incomes. In addition, according to the director of the HSE Labor Research Center in an interview with RBC, Rosstat calculates the size of salaries in large and medium-sized enterprises, ignoring small organizations.
The real situation of Russians may deteriorate even faster due to the continued accumulation of outstanding debts and a reduction in accumulated savings. Thus, a peculiar effect of inertia is triggered.
What are the forecasts
Economists are not in a hurry with optimism, even despite the sharp increase in the cost of hydrocarbons. Russia's economy continues to stagnate, and GDP growth is around 1 percent per year. Therefore, experts do not have high hopes for an increase in income.
Moreover, according to the chief economist of Alfa Bank Natalia Orlova, one should not expect an increase in the well-being of citizens in 2018. The indexation of salaries will be very low - only 2.5%, which corresponds to last year’s inflation, but this year inflation may be higher, and the main risk of price dispersal will fall on the second half of this year.
GDP growth in 2018, despite high oil prices, is projected to be very low - only 1% according to Alfa Bank. At the end of last year, a decline in industrial production was noted.
Distribution of income by population
In 2017, a wide range of average wages was observed in Russia, due to the uneven development of the regions. The best financed population of the north of Siberia and the Far East. Low population density combined with large revenues from the extraction of valuable raw materials allow local authorities to allocate sufficient amounts of money for each person. The presence of the so-called northern allowance may also affect.
In the regions of Southern Siberia and most of the European territory of Russia, the income level is significantly lower. So, if in Kamchatka, Sakhalin, Chukotka, in Yakutia, the Magadan Region and the Khanty-Mansi Autonomous Area, the average monthly wage is more than 40 thousand rubles, then in the Moscow Region, Primorye, Arkhangelsk Region and the Komi Republic - from 28 to 40 thousand. In the Volgograd and Rostov regions it is already from 18 to 20 thousand rubles, and, for example, in the Astrakhan region, Kalmykia, Dagestan, the Stavropol Territory and the Saratov Region - less than 18 thousand rubles.
Thus, in climate-friendly regions, the income level of the population is much lower than in severe ones.
Minimum wage
In Russia, this parameter with the abbreviation SMIC is legally approved. On its basis, benefits, fines, taxes and other payments, including minimum wages, are calculated.
The employer must pay the employee a salary of at least the minimum wage. At the same time, they can go to the tricks, setting part-time work, which allows to cut salaries without violating the law.
The size of the minimum wage has increased repeatedly. Since January 1, 2018, its value is 9489 rubles per month. Now the government plans to raise it to the level of a living wage. However, such actions aroused objections from employers who were sent to the State Duma. According to deputies from the party "United Russia", increasing the minimum wage will put a big burden on the budget.
In the meantime, the minimum wage in Russia is one of the smallest in the world. It is even inferior to a number of countries in Africa. This is due to the fact that it is equated to the cost of living, and not to the size of wages, as in most other countries of the world.
As experiments have shown, living on a minimum wage in 2017, taking into account utility bills, is very problematic.
