Fall in real incomes of Russians speeds up

2021-05-01

Authorities put everything upon the coronavirus

According to Rosstat, the year-on-year real disposable income of Russians fell in the first quarter of 2021 by 3.6%. In 2020, household income decreased by 3.5% within the year. Dmitry Peskov commented on the data of Rosstat, saying that by the end of the year it will be possible to stop the drop in people’s incomes, which is taking place against a background of the coronavirus pandemic. According to Peskov, the situation is getting even worse in many countries.

Of course, now the authorities are more than comfortable blaming it on the epidemic, showing that the entire system has nothing to do with the absolute impoverishment of the working people. This is all because of the epidemic as a suspending event. This is far from saying, however, that the fall in Russians’ incomes is caused only by the coronavirus epidemic. Real incomes have been falling for the seventh year running. On the other hand, the coronavirus pandemic was able to lead to such destructive consequences precisely because the current system in Russia turned out to be incapable of combating this issue. And this concerns not only Russia but rather many other countries. At the same time, Vietnam is much poorer than many countries in the world, including Russia, but they have managed to prevent the increasing prevalence of the infection within the country.

The authorities are creating make-work activities to improve the living standard of the working people. Special funds are allocated and paid out as a form of income support to young families, parents of schoolchildren. These measures were due to the fact that the Government’s authority had broken down after raising the retirement age and showing weakness and inability to solve people’s problems when the pandemic began. But at the end of 2021, elections to the State Duma will take place and the authorities need “United Russia” to command the required absolute majority of votes. Therefore, we believe that social assistance measures are temporary, and they will be curtailed soon. And the assistance itself against the backdrop of fewer jobs, dropping wages, raising the retirement age, remains extremely poorly funded.

To fundamentally raise living standards, it is necessary to take measures to ensure guaranteed income growth. These measures are increasing retirement benefits, scholarship allowances; lowering the retirement age; increasing the minimum wage level; reducing public utility rates and public transportation fares; introducing mandatory indexation of wages by the inflation rate. But these measures, in contrast to the one-time handouts, will require significant expenses from the state and business. And therefore, the authorities will not agree to this, of their own free will.