Poverty in Russia — Stereotype, or Fact?

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By Janna Johnsen

Norwegian mainstream media often talks of “enormous” poverty in Russia. But is it that big, or so different from poverty in Norway?

The international poverty line is $ 1.90 per day. International statistics show that no one lives on less than $ 1.90 in Russia. In Norway, 0.2 percent of the population do. 0.2 percent in both Russia and Norway live on less than $ 3.2 per day. Slightly more Russians than Norwegians live on less than $ 5.5 per day. When we compare these figures, we must also remember that the prices of most goods and services are significantly lower in Russia than in Norway.

National poverty lines vary from country to country. 12.3 percent of Russians and 11.2 percent of Norwegians live below the national poverty line. Since 2000, the number of poor people in Russia has fallen 2.3 times.

Household Income

If we look more closely at household income, the average monthly salary in Russia is now RUB 49,600, the average pension is RUB 14,900, the minimum wage is RUB 12,100 and the disability benefit is RUB 11,300. But many Russians (about 40%) still receive wages “under the table”, so real incomes in Russia are much higher than the statistics show.

Taxes

So what about the expenditure? Income tax on wages is 13 per cent. Of various fixed expenses, approximately RUB 8-9,000 goes to food and housekeeping, RUB 5,000 to municipal taxes, RUB 2-3,000 to transport (based on my private expenses, for one person). Only 9 per cent of the population have a mortgage, and for them an average of 27 per cent of their monthly income is used to service the loan. In Russia, 87 percent of the population owns their own home (in Norway, the figure is 77 percent). This is a result of privatization in the 1990s, when everyone was given the possibility to take over the housing they rented from the state for free.

Pensioners and the Vulnerable

The retirement age in Russia in 2020 is 56 years for women and 61 years for men. The old-age pension is adjusted annually corresponding to the inflation rate. Retirees pay neither income nor property taxes, get to buy products with a 10 percent discount in the morning, get free vital medicines and can use public transport for free. People in a difficult life situation receive significant support from the Russian state: families with many children, single parents, people on disability benefits, and the unemployed. There are particularly good schemes for families with children. In the case of childbirth, the parents are paid RUB 466,000 (a normal annual salary), low-paid families are paid a monthly basic amount for each child (as in Moscow, for example, RUB is 15,200), and maternity leave is 3 years, of which 1.5 years are paid. Low-income families receive up to 100 per cent subsidies for home purchases, and at the age of majority, all orphaned children are allocated their own home.

Upward Mobility

There are many opportunities to increase the income, such as creating one’s own workplace, moving to another region, increasing qualifications or being proactive in job search. Unemployment is now 6.1 percent in Russia. Still, many industries, such as the construction industry, transportation, service and cleaning, are screaming for people.

So, the alleged “enormous” poverty in Russia is a myth, the well-being of Russians is about the same as in any Western country.

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