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What is the Russian middle class, where it works and how much it earns: extensive study by KP

Date: July 12, 2024 Time: 18:14:06

The middle class in Russia is made up of educated professionals. Photo: freepik.com

A “new middle class” has appeared in Russia! Well, according to the experts. Lately they compete with each other over which areas salaries have increased due to staff shortages. At companies in manufacturing, information technology and construction, wages rose by more than a quarter over the year. And in some places, over the last few years, they have actually doubled. Several workers, especially in regions that previously received low wages, now earn wow! And they can afford a much higher level of consumption.

So, let’s rejoice at the expansion of the middle class in our country? However, a delicate question arises: is it not possible that, on the one hand, it is expanding and, on the other, it is shrinking because some of the old “middle peasants”, who can no longer maintain their previous levels of life with holidays abroad and foreign cars? And in general, who in Russia can now be classified as part of this same middle class, which seems to be not poor, but not rich either? What does he look like, this “middle peasant”?

HALF THE COUNTRY OR A SELECTED CIRCLE?

There are many methods to calculate who belongs to the middle class. One of the most popular is that of the World Bank: if a person has an income one and a half times or more the poverty level, they are already middle class.

According to this version, the majority of our population can easily be classified as middle class. Rosstat has set the poverty threshold for 2023 at an average national level of 14.3 thousand rubles. Therefore, if the family income per person exceeds 21.5 thousand rubles, this is already average. Of course, there are details related to the difference in costs and living standards between regions. And the fact that, according to this method, in the Krasnodar Territory there is a middle class, in Moscow and Chukotka there is poverty. But still, the “average” rating is lower than the average income of the country (see “Try it yourself”).

It is true that then the difficulties begin. Because, in addition to the level of income, the World Bank also takes into account the level of consumption. And the possibility of buying a new foreign car, going on vacation abroad and educating children are not very relevant parameters for the Russian middle class, even if they hypothetically have money.

Analysts from the Higher School of Economics proposed a different methodology a couple of years ago: the middle class is people who have a certain professional status (managers, qualified specialists), higher education and an income of at least 125% of the median ( The median is when half the country has less income and the other half has more).

It was on the median, as a basis for calculation, that our economists insisted, arguing that there is a wide dispersion of income in the country and its arithmetic average does not give an idea of ​​the situation.

Using the “tower” method, it turns out that families with an income of at least 50 thousand per person can be classified as middle peasants (see “Try it yourself”). But this is the national average. And in Moscow, for example, from 105 thousand. That is, a metropolitan family of four people (with two children) must earn at least 400 thousand rubles. Very cool. Although, if you look at housing prices in Moscow, not even the middle class, but the “mass” class, it still will not be enough.

The methodology of the Swiss bank Credit Swiss is also known, which annually prepares the Global Wealth Report, which reports on global well-being. Let’s not get bogged down further with arithmetic, but according to the Swiss, the Russian middle class should have an income of approximately 200 thousand rubles per month per person. This is just over 3% of employees. Something very hard.

But who to believe?

EDUCATE PROFESSIONALS

“The middle class is, above all, a social status,” explains Alexander Safonov, vice-rector of the Financial University of the Government of the Russian Federation. – Let’s remember where this concept comes from. By the 70s, a layer of people associated with management, the service sector and small businesses had formed in the West. All were classified as middle class. These people were united by a high level of professional training, which allowed them to earn much more than ordinary workers. Therefore, middle class necessarily means a good education. In Western conditions, at least, the university. Or university. These are specialists. And what they consume and what cars they drive is secondary. Otherwise, prostitutes and bandits who have a good income and drive expensive cars should be classified as middle class. But nobody does this.

In our country, as the expert recalls, it has traditionally been customary to classify employees as middle class. Those who are not the working class or the peasants: the intelligentsia. In the 90s, entrepreneurs joined them: small and medium-sized companies.

“Unfortunately, in our reality it turned out that a high level of education was not necessarily accompanied by a corresponding increase in wages,” continues Alexander Safonov with his historical excursion. – This caused confusion. Doctors, teachers, scientific and cultural workers, engineers should belong to the middle class. And the fact that for a long time they didn’t fit in there in terms of income is due to distortions in wages.

As for the financial criteria of the middle class, according to Safonov, it is better not to start from formulas, but from simple logic, taking into account the realities of a particular country. The middle class is middle class because their income is at the level of the average for a particular region and above. And if with this income it is difficult to buy an apartment and a new car, it is due to distortions in the economy and prices.

WHAT ABOUT THE MESSENGERS AND TAXI DRIVERS?

According to logic, it is quite difficult to determine who to include in today’s Russian middle class. Our unskilled workers now often receive much more than skilled workers: experience, many retraining courses and two higher educations. And their salary growth is often faster than even that of IT specialists. But since a construction site is missing about a million workers, a simple mechanic is a very scarce profession, and it seems that half of the country has already been dedicated to couriers, but there is still a shortage of personnel there.

“The income of couriers who travel around the city on bicycles and scooters often exceeds that of any manufacturing industry and even the IT sector,” says Alexander Safonov. – But it is not necessary to enroll them in the middle class. And not just because of educational qualifications. But because, in addition to absolute income figures, there are also other indicators. The income that allows representatives of a given profession to be classified as middle class must be sustainable. And not because of market conditions, which will change tomorrow. And this should not be explained by overtime and working 12 to 16 hours a day, as couriers do now.

But the engineering and design staff of industrial companies, whose demand has increased due to state defense orders and import substitution, rightfully have a place in the middle class. As well as IT specialists of at least an intermediate level (those who really already know and can do something, and not yesterday completed a three-month online programming course). This also includes highly skilled workers who occupy positions that often require higher education (for example, working on modern, complex machines with digital control).

“Unfortunately, now an ordinary collector, who simply inserts a screwdriver in the same place, can get the same amount,” laments Safonov. – Since there are no people, we have to attract them with high salaries. But it will not always be so.

According to forecasts, with the development of production automation (and personnel shortages strongly driving it), these “ordinary assemblers” will be the first to go. Unlike those whose knowledge and level of education allow them to control robots.

In other words, someday time will put everything in its place.

ASK FROM THE EDGE

Who is considered rich?

“In my opinion, people with an income of more than 10 million rubles a year (that is, more than 830,000 a month – Ed.) – according to our reality, can be considered rich,” says Alexander Safonov. – According to the tax service, in 2023 there were only 167 thousand people (0.3% of income tax payers). I suspect there are actually more, because it is unlikely that everyone who hides their income will come to light. But this is still a very narrow layer. Therefore, out of 10 million, it is no longer the upper layer of the middle class, but the rich.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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