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Thursday, February 01, 2007

Those Who Cannot Remember History are . . . Russians!

Kommersant gives us yet another reminder that life in 2007 Russia is no different from life in 1907 Russia for the vast majority of people. Then as now, a tiny cadre of superelite glide through the major cities in gilded carriages while the vast unwashed population languishes in extreme poverty and quite literally dies off. Russia has learned nothing from the extremes of Tsarist behavior, and moreover has learned nothing from the abuses of the post-Tsarist Soviet era. Now, it is combining both forms of failure into one utter nightmare of a society doomed to become "Zaire with permafrost."

The gap between Russia’s richest and poorest shows no signs of narrowing, according to a new study. The All-Russian Center of Living Standards has presented a report on incomes in Russia in 2006, outlining the emergence of well-off Russians with incomes over 20,000 per capita.

In a study on the income and living standards in Russia, the Center of Living Standards used data of the Russian Statistics Agency and the Pension Fund. The research says the average nominal wage in Russia in 2006 was 10,684, slightly higher than in official reports of the Statistics Agency. LR: That's $395 per month. And it's the average. Average means a huge segment of the population is below that, especially since Russia has a large number of millionaires. For every millionaire Russia has, it has to have roughly 3,500 people learning just $100 per month to keep the national average at $395 per person.

According to the study, the income gap between Russia’s 10 percent of riches and poorest people is not narrowing, contrary to reports of the national statistics agency. The difference is still seven-fold, 0.1 percent up last year, compared to 2005.

The percentage of Russians living below the subsistence level went down in 2006 to 11.9 percent from 13.3 percent in 2006. The Russian Center of Living Standards quotes 3,291 rubles a month as the subsistence level in 2006. LR: That's $4 per day. The Russian government claims $4 per day is enough to live on in Moscow, the world's most expensive city.

The report also shows that the number of people with incomes between 6,963 and 20,504 rubles grew from 38.7 to 40.4 percent last year. This is the category that the center’s experts call Russian middle class. In its recent study, the Sociology Institute of the Russian Academy of Sciences estimated the number at 21 percent. LR: In Russia, a monthly income of $750 per month is considered high-end upper middle class. That's $40 per work day, or roughly $5 per hour for an eight-hour day. An upper middle class Russian doesn't even earn the American minimum wage. Russia is rolling in oil revenue, and this puny wage group increases by less than 2%? Something is rotten somewhere. Guess where.

The number of “well-off and rich” Russians with incomes higher than 20,500 rubles went up last year from 8.5 to 9.2 percent, according to the Living Standards’ research. LR: That is not a misprint. In Russia, you are "rich" if you earn more than $5 per hour.

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