Russian Economy Struggling Due to Low Oil Prices and Sanctions
Despite a slight increase in average monthly salaries, nearly half of Russian workers are now earning less than $550 per month. The quality of life in Russia has been deteriorating, with stagnation in disposable income being a major issue. According to Rosstat, the median income in Russia was 34,335 Rubles per month in April. The overall nominal monthly income for January-June 2019 was 46,300 rubles per month, marking a 7% increase from the same period in 2018. Additionally, only 0.1% of Russia’s working population earns over 1 million Rubles ($15,400) per month, while around 775,000 working Russians make less than the minimum wage of 11,280 Rubles ($173.74) per month.
Rosstat also tracks the salaries of employees in large and medium-sized enterprises monthly. Although an exact figure is not available, it is believed that the median wage would be lower if these employees were included in the calculation. Vladimir Gimpelson from the Higher School of Economics highlighted that the median wage might decrease significantly when considering employees from all enterprises. Currently, about 14 million Russians are employed at small and micro-sized enterprises, which could further bring down the average and median wages, as noted by economist Yelena Yegorova.
Private debt is another pressing issue in Russia given the recent decline in wages. To make ends meet, many Russians are turning to loans, exacerbating the situation due to the high-interest rates attached to these borrowings.
