19 Million Russians

Over 19 million Russians live in poverty, according to a recent article in Dengi. But how is poverty determined in the Russian context?

For Rosstat to categorize you as in poverty, you need to have an income lower than the subsistence minimum. For the majority of Dengi readers, this level is mockingly low: 9,452 rubles ($139) a month (10,178 rubles, $150, for an able bodied person, 7,781 rubles ($115) for pensioners, and 9,197 rubles ($136) for children according to levels the government set in the fourth quarter of 2015). There are many such people (19.2 million, or 13.4 percent of the country), and they are increasing (by an additional 3.1 million people last year).

This is, of course, higher than the index the World Bank uses to determine the poverty. Since 2015 it’s at $1.90 a day, that is about 4,000 rubles a month at the current exchange rate. However, here the word “poverty” (bednost’) is a translation of the English word “poverty” which more corresponds to the Russian word “destitution” (nishcheta). But apparently there are still quite a few of these in Russia, though there aren’t any accurate or up to date estimates. Rosstat data provides the best possible approximation: 3.3 percent of the population had an income below 5,000 rubles a month in 2014.

Percentage of the Russian population earning less than the highest subsistence minimum

Percentage of the Russian population earning less than the highest subsistence minimum

Poverty, as the Dengi article emphasizes, is also a subjective category. A person is poor if he or she feels poor. The article cites one Dengi reader, a businessman from Moscow who, before the recession, thought that an income of $10,000 a month was poor. Now this entrepreneur’s family of four lives off of $4000 a month, a bit more than Moscow’s per capita income of 60,000 rubles ($886) a month. Not exactly poor compared to many, many Russians but certainly poorer, a condition Dengi calls the “new poor.”

Russia's regions ranked by poverty index.

Russia’s regions ranked by poverty index.

This “new poor” is arguably a bigger political problem than the 19 million Russians living under poverty. These people, after all, are the beneficiaries of Putinism—how could a guy who thought that an income less than $10,000 a month was poor not be—and having tasted the “good life”—vacations abroad, disposable income, and a decent level of conspicuous consumption—are now seeing it gradually whither under Russia’s recession. Other anecdotal evidence from Russia’s educated and skilled classes tell a similar story.

Ranking of Russia's regions by percentage of population living below the poverty level.

Ranking of Russia’s regions by percentage of population living below the poverty level.

But it’s not just “Putin’s children.” Putin’s “silent majority” are also feeling the pains of recession. The subjective sense of impoverishment is a cross class phenomenon.

Indeed, a recent Levada Center poll revealed that Russians think the three most important problems in the country are rising consumer prices (77 percent), poverty (49 percent) and growing unemployment (43 percent).

There’s also been an increase in labor and social protest. The ongoing long distance truckers’ protest is the most visible manifestation of Putin’s “silent majority” becoming more vocal. And while most of these conflicts remain small and localized, they might prove trouble for United Russia in the upcoming local and parliamentary elections.

A new project by the Center for Economic and Political Reform (TsEPR) seeks to track and map labor protests in Russia. According to their first results, there have been 132 labor conflicts in the first two months of 2016. Over half of them have been over wage arrears (as of March 1 recorded wage arrears amounted to 3.3 billion rubles or $48.7 million). Here’s a map of what the TsEPR calls the “social and economic hot spots.” The provinces with the highest number of protests include Samara, Sverdlovsk, Chelyabinsk, and Kirov regions. Interestingly, the poverty rates in these regions tend to measure below the federal average: Samara, 12.6 percent; Sverdlovsk, 8.3 percent; Chelyabinsk, 11.7 percent; and Kirov, 12.7 percent. Meaning that it’s not the impoverished who are protesting, but those trying to maintain their standard of living in rough economic times.

And this is all at a time when journalists are digging up real estate and offshore schemes linked to Vladimir Putin, his family, and circle, not to mention many others in the Russian establishment. But, sadly, Russia is no outlier here, only a symptom of a more widespread disease. It should be stressed that Putin’s people are using the very methods and institutions many of the world’s oligarchs, criminals and notables employ to secretly squirrel away their billions.

But, hey, this is all part of a Western smear campaign to discredit Russia before the elections, right?

Well, tell that to the 19 million Russians living on less than $139 a month.