Life below the line: how to understand that you are poor

20 million Russians live below the poverty line. This figure was voiced by President Putin at the Congress of “United Russia”, calling it humiliating. And the estimate is difficult to add anything — except the fact that this figure, according to calculations of experts of the Ranepa, is a record high for the last 6 years. By the end of the second decade of the XXI century, having passed the quarter-century path of building market economy, we came to the conclusion that every seventh Russian is poor. In other words, his income is less than 10-11 thousand virtually any a month: it is now the country’s subsistence minimum for different categories of citizens, which draw the line of poverty.

photo: Alex geldings

The President in his speech not only marked the point of pain, but also urged, relying on economic growth to curb poverty as it was done previously with inflation. For those who have not quite mastered the new-fangled financial terminology, explain that to target means to set a specific goal, to achieve which accordingly changed the policy Department or even the state. In the case of the inflation target really worked: at the end of 2014, when the yard was raging economic crisis and the ruble risk fell into a tailspin, the Central Bank announced inflation target to 4% over three years. The skeptics, of which there was an absolute majority, twisted a finger at a temple: inflation at that time exceeded 15% in annual terms, and it seemed that it only gets worse. But the fact remains: today, we have inflation even lower than the projected 4%.

Now the same focus, the President proposes to do to the poverty rate. The Minister — Ministry of trade has already announced the parameters to be pursued. According to Maxim Topilin, if it is 13-14% of the Russian population is among the poor, after 6-7 years, this figure can be cut in half and to increase to 7-8%.

The Minister even called the set of measures that will allow this goal to achieve: raising the minimum wage (SMIC) to a living wage, General wage growth, and demographic benefits to be provided to families in need criteria. No words, all these proposed measures, which are important. But a great deal of confidence that they will work — no. To increase the minimum wage to a living wage, we are trying all XXI century, and so far without success. The next date achieve this from January 1, 2019. But in order to make this work, requires many billions of virtually any from the Treasury. And the budget is still in deficit: the “extra” money there is clearly no. Moreover, the Reserve Fund this year will end – on under the hand will have funds from the national welfare Fund, which are also, alas, is not infinite.

As for the promised growth of salaries – it is, of course, already announced that some categories of public sector salaries index in 2018 at 4%. However, wage growth has occurred in the current year. If you believe the official statistics, the nominal (accrued) wages have risen over the past 11 months by 7%, and the real (minus inflation and mandatory fees) — 3%. But it did not save the Russian population from falling real incomes — they will be reduced for the year by 1.3-1.4 percent. According to experts, this is due to the high degree of debt load of the population and a large informal sector, whose income is not included in the statistics.

In General, I would venture to suggest that the proposed measures to achieve the target of poverty is not enough. In order to overcome poverty requires a more permanent and high economic growth. And with that, we still have a problem: GDP growth this year — barely audible, it is unlikely to exceed 1.5% to 1.8%. We are increasingly lagging behind on this indicator from the rest of the world, which grows on average by 3-3,5% per year. And our friends in the BRICS — China and India – and did give 6-7%.

Besides, experts are not satisfied with the quality of Russian growth — all of it achieved, in fact. due to the oil and gas sector (this year, we will remind, the price of a barrel of oil has increased by half compared to the previous year) and generated large public corporations that “rule” in all key areas — gas, oil, military-industrial, banking…

People, in order to cope with his personal poverty need opportunities for self-realization, primarily in the small and medium business — if not as entrepreneurs who own at least as wage workers, receiving a decent and growing wages. But that is not our way, the previous crisis years, as you know, closed down, went bankrupt or simply left in the shadow of a huge number of small businesses and individual entrepreneurs. In these circumstances, people there is hope in the fight against poverty not on our own strength and abilities, and on handouts from the state. In the coming months — thanks to the upcoming presidential elections! — those planned. What will be next?

There are fears that the target on poverty, we will witness different statistical manipulations. For example, you can lower the cost of living, as has been done in the first half of this year. Authorities explained this alleged seasonal cheapening of fruits and vegetables, which is the basis of the consumer basket, on the basis of which is determined by the cost of living. And the lower hell, which determines the poverty level, so, or not, fewer people remain under it and over it turns out to be more and more formally to the poor is no longer a concern.

Perhaps when the time comes to report on the conquest of poverty, the authorities again will do the same focus — in any case, this is much easier than to provide the country with stable economic growth, to create conditions for development of small business and incentives for personal growth of millions of people.

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