The middle class in Russia is alive and feels good

In one of my recent articles, Agency Bloomberg said the growth concerns of the Central Bank of Russia the growing level of inequality and reduction in the number of families with average incomes. According to analysts of the Central Bank, this may lead to loss of control over inflationary processes in the country.

The Agency cites statistics of the Central Bank in September about the continued fall in retail sales in Russia, and also incomes in annual calculation at the level of about seven percent. What is happening in the economy trends, of course, reflected on the middle class, which is very sensitive to the socio-economic situation in the country.Almost simultaneously with the Bloomberg experts Sberbank CIB has published updated information received in the study, «Consumer index Ivanov». Based on these data, analysts have concluded that since the beginning of the economic downturn in Russia, there are more than two years, the number of Russians who identify themselves as middle class fell from 61 to 51 percent. According to analysts, this is due to the higher rate of expenditure growth, which have not kept pace with the incomes of Russians. In turn, the increase in the difference between expenses and income influenced the purchasing activity of citizens and the consumption of goods that are not necessities. In this case, surprisingly, a few days ago the all-Russia centre of studying of public opinion (VTSIOM) published the results of another study of the middle class in Russia. According to sociologists, the number of citizens identifying themselves as middle class, over the last 25 years increased by 10 percentage points and amounted to 59 percent. The proportion defining their position as «below average» and «low» over the years, virtually unchanged, accounting for 19 and 12 percent, respectively. At the same time only 5 and 3 per cent of the respondents assessed their situation as «above average» and «high».

Explaining the apparent discrepancy between the figures in different studies, it is necessary to understand that different organizations use different parameters for the definition of the middle class. So, for example, according to the Institute of contemporary development (INSOR), the middle class in Russia can be attributed only 7 percent of the population, whereasthe Institute of sociology, Russian Academy of Sciences (RAS) believes that the middle class in Russia are about 20-25 percent of the population. In addition, there are other assessments, which often result in diametrically opposed figures.

The criteria for this, of course, sometimes substantially different.One of the definitions of the middle class says: «This is a social group of people having a stable income sufficient to meet their wide range of material and social needs.» During the entire post-Soviet period is an ongoing debate on how quantitative and qualitative indicators that will allow or not allow to carry man to the representatives of the considered group of population. Thus, according to the world Bank, in Russia the middle class can be attributed to households, the consumption level of which at least one and a half times higher than the national scale of poverty (the subsistence level in 2016, amounting to about 10 thousand rubles). Those in Russia most. So, based on this criterion, a large part of the Russian population even with the crisis, remains middle-class.

Thus, according to the calculations of the same world Bank, the average monthly income of a typical representative of the global middle class starts with $ 3,500.
In Russia, such a person should get about 220 thousand rubles a month. However, the number of citizens receiving per month such amounts in Russia is very small, which, given this criterion, can be attributed to the Russian middle class not more than a few percent of the population. In General, the average grade is calculated on the basis of a set of parameters such as income level, purchasing power, level of consumption, level of education, own real estate, vehicles, as well as the ability to continuously update all of this: to obtain new skills and educate ourselves, to buy a new property (this, however, will have to save), cars, new gadgets and things like that.
However, it is understood that the criteria according to which is determined by a person belonging to middle class in the West, require more precise definition, taking into account Russian specifics. Still society of the West and Russia are quite different, including in economic terms, therefore, a common approach is hardly justified.

While in our country after the collapse of the USSR the term «middle class» is actively manipulated
politicians and economists are wrong in attempting to portray its members as
people of a certain political orientation. So, in 90-e years the average
the class was described as the social base of democracy and market reforms
as people who support the President and the government on their path of formation of market economy in the country. With the beginning of zero, many analysts began to call the middle class of those who support President Vladimir Putin, his political and socio-economic line, making the support of political stability in the country.
There is also a point of view according to which the definition of the middle class focuses on the level of education, involvement in intellectual activities, as well as the support or denial of the liberal-democratic values in their Western sense. As a rule, such assessments operated by the opposition. Especially clearly this approach to defining the middle class emerged during the «Bolotnaya» protests of 2011-2012, when released on anti-government demonstrations of citizens began to call «angry middle class».

So in many ways, representative of the middle class in large cities has become synonymous with opposition adjusted citizen. However, over the past few years, the political differentiation in the definition of the middle class gave way to socio-economic criteria.It should also be noted that in modern Russian reality, the income can not be the most objective method of identification of the representative of the middle class. For example, an electrician who barely graduated nine classes of secondary school and then was educated in such not respecting our public opinion of a professional school (vocational school), but who is qualified in his business professional with Golden hands, could earn much more than some middle management. From these positions the middle class will be the electrician, and the Manager will stand at the position lower.

On the other hand, the electrician has no higher education, and the Manager it is, and sometimes this «crust» is very prestigious Metropolitan University. And from these positions the middle class would be considered already a Manager, not an electrician, despite the fact that the income level of the latter is higher.

Besides, we have a considerable number of people who received a good education, but work or a degree, or earn so little that their income does not allow to attribute them to the representatives of the «Golden mean».
Given our specificity, we can distinguish several levels of the socio-economic situation of citizens: not enough even for food – poor, only enough for food and incidentals, a poor enough for food, and incidentals, and clothing, and other purchases, as well as travel – middle class, enough for all needs – rich.

It appears that the majority of the population are in the second and third categories. In principle, a typical Russian average household can be considered a family with an income in Moscow and St. Petersburg from 50 to 100 thousand rubles a month per adult, for the rest of the country is of the order of 30-50 thousand. Such a family has one or two children, apartment, car, and perhaps the country. They can afford to travel at least once a year. In other words, those people who don’t pay much attention to the price tags in stores, but for whom buying a car or vacation in distant countries. Does the country have such people? No doubt. A lot of them? Enough. As evidenced by recent figures on the growth of purchasing cars on credit, the growth of charity payments (probably signifying the existence of a surplus of cash) and increase more than 40 percent over the last nine months the volume of mortgage housing loans. It is obvious that the people’s income is only enough for food, are unlikely to take out a loan to buy a car. Even less likely that they will take such a serious financial commitments like mortgage payments. Incidentally, as for the first and for the second you need a certain downpayment, the amount of which you want to save for some time. Poor savings can not afford, the middle class can. Accordingly, the increase in real estate transactions is one of the hallmarks not only of preserving stratum in Russia «Golden mean», but perhaps its growth even during the crisis. So the rumors of the death of the Russian middle class is clearly exaggerated, although natural tendencies, at least prevent its growth, in Russia too. Well, in the coming years, economic growth needs to increase their number and to increase well-being.

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The middle class in Russia is alive and feels good 26.10.2016

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