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Helping millions of Russians to rise above poverty line quite a challenge

November 27, 2014, 15:20 UTC+3 Alexandrova Lyudmila
© Yury Smituyk/TASS

MOSCOW, November 27. /TASS/. The fact that one in nine Russians is below the poverty line is officially recognized by the authorities. Addressing this social ill in Russia is a really daunting task, for there are very different groups of the poor and the authorities should take a differential approach to each of them, scholars say.

At the moment 15.7 million Russians live below the poverty line (in a country with a population of 146.7 million), Deputy Prime Minister Olga Golodets said several days ago. Inflation may push the rate further up, government officials believe. Families with children take the top line in this risk group.

Low incomes of the population are the main reason for this social disaster. According to the federal statistical service Rosstat, nearly four million Russians get a wage below 7,500 rubles (roughly $160).

Poverty statistics vary, though. Rosstat says that in 2013, 15.7 million were in the low income brackets. The number of the poor grew as the subsistence level went up last year. On the other hand, back in 2012, President Vladimir Putin mentioned 18 million poor Russians.

The chairman of the Federation Council’s social policies committee, Valery Ryazansky, believes that the official statistics are overstated three times, because many Russians do not declare their real incomes in order to evade taxes. “The real level of poverty ranges from five million to seven million,” Ryazansky said.

Poverty is a relative phenomenon and largely depends on how exactly it is gauged and understood, say Higher School of Economics senior lecturer Natalya Tikhonova and lecturer at the Higher School of Economics department of the economy Vasily Anikin in an article entitled "Poverty in Russia against the background of other countries." According to their statistics, 45% of all employed Russians — low and medium skilled workers — should be regarded as poor. About 20% of the poor are low and medium-qualified office workers.

This type of poverty is called industrial. It prevails in all developing countries. The reason behind it is the oversupply of low-skilled work force, which results in low wages paid to this category of the employed. At the same time, there are very few jobless people in this group of the poor.

It is generally believed that many Russians are poor and the wages are one of the lowest in the world. But Russia cannot be called a country of the poor, the scholars say. By all key parameters of the socio-economic development characterizing the living standards, Russia holds a place between Britain and Germany, on the one hand, and the BRICS countries, on the other, but much closer to the developed countries.

Doing away with poverty in Russia will be not easy at all, because it is very diverse. In the low income group one finds rural residents who have dropped out of the post-industrial era, low-skilled workers, blue collar workers, teachers, and parents of children under age. Each group of the poor requires its own approach and individual forms of state support. For instance, the measures that are certainly to succeed in Moscow may yield no effect at all in the Caucasus republic of Ingushetia and the other way round.

Ryazansky believes that in order to narrow the gap between the rich and the poor, the government should not only raise wages and salaries, but also bring the focus on highly paid categories of its citizens. He suggests making them pay higher taxes, narrowing the gap in the remuneration of managers and ordinary factory and office employees, and restricting the retirement bonuses (gold parachutes) paid to the companies’ top managers.

Rosstat this week published a report saying that the average wage of Russian civil servants last year went up by 18% to nearly 100,000 rubles. In the meantime, the average wage in the country during that period stood at 31,600 rubles, showing a 9.8% growth against January-September 2013.

ITAR-TASS may not share the opinions of its contributors