Rising prices in stores outstrip wage increases
In the first half of 2023, real incomes of Russians increased by 3.9% year-on-year. This is stated in the latest report of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMAFP), which also indicates a decrease in the number of people living below the poverty line in the country. True, it does not make life better for the Russians. The reason for this is the weak ruble and high inflation, nullifying any hopes of our fellow citizens to strengthen their own well-being.
Judging by the CMASF report, in the period from January to May, all indicators of the real incomes of the Russian population strengthened — in particular, real wages rose by as much as 6%. Similar positive results were recorded only in the relatively prosperous 2021, while in 2022 the real incomes of our compatriots fell by 1.5%. Now a change in a more favorable direction is again noted; the poverty rate has renewed its historical low, dropping to 9.8% (up to 14.3 million people).
However, there is reason to believe that the numbers and percentages that are pleasant to the ear are only the average temperature in the hospital. In fact, only in four Russian sectors (financial sector, mining, information and communications, and professional scientific and technical activities), the average wage is five times or more higher than the minimum wage. At the same time, in education and agriculture, the average salary does not exceed three times the minimum wage, and in the hotel and restaurant business, salaries are even less than this frankly nasty threshold. On the face of a significant gap in the monetary value of diverse professions and, therefore, the diametrically opposite material situation of various strata of the country's inhabitants. According to the leading expert of the Center for Political Technologies Nikita Maslennikov, the statistical growth of real incomes of the population does not yet mean that in the foreseeable future Russians will be able to count on a serious strengthening of their own well-being.
— The increase in salaries, which still remains the main source of income for our compatriots, pulls in a chain an increase in consumer demand, including for foreign products. As a result, the imbalance between the state's exports and imports is growing, which in turn leads to a weakening of the ruble and acceleration of inflation. Moreover, the last two negative criteria demonstrate an enviable relationship: a 10% fall in the rate of «wooden» leads to an increase in consumer prices by 0.5-0.6%.
— Taking into account other negative circumstances, annual inflation in Russia, according to the Ministry of Economic Development, in the week of August 8-14 amounted to 4.66%. In turn, seasonal inflation, the essence of which is that supply and demand, as well as the price of the same goods and services, can vary depending on the time of year, already exceeds 7%.
— Taking into account the fact that the growth of wages in Russia is not accompanied by an increase in labor productivity, the demand for imported goods will continue to rise, pulling up the rise in prices not only for foreign, but also for domestic products. In this regard, the forecasts of government financial departments, including the Bank of Russia, that given the ongoing tightening of monetary policy in 2024, annual inflation will return to 4% and will remain close to this mark in the future, are still highly doubtful. Therefore, the joy of increasing real incomes of the population is overshadowed by a simultaneous increase in prices in stores, which reduces any salary increases to almost nothing.