Friday, November 30, 2012

Russian minimum wage leaves over a million working Russians below the poverty line

 More than a million Russians receive a monthly wage equivalent to $148 U.S. which is well below the poverty line in Russia of $220. Most of these workers are in the public sector.
According to the Public Health and Social Development Ministry 650,000 of the 1.3 million Russians who receive the minimum wage work in the public sector. Next year the minimum wage which employers must pay workers is to be increased by 13%. This will bring the wage up to $170 a month, still well below the poverty line of $220 a month.
The Russian minimum wage is far below that in many developed countries. Luxembourg, Netherlands and Belgium top minimum wage lists at minimums of over $1500 a month. However, Kygryzstan is far below Russia at $24 a month.
In 2011 the number in poverty in Russia increased by 2.3 million over 2010 and in total were 22.9 million according to the Russian Federal Statistics Agency. Many critics claim that the official statistics understate the real poverty levels in Russia.
Official statistics define a person as impoverished if they have an income lower than what is called the living wage which is calculated by the state. The wage would be enough to ensure physical survival but that is all. The 22.9 million living at this level makes up 16.1% of the Russian population.
The cost of living has been rising in Russia by 17% from 2010 to 2011, while salaries have not kept pace leading to more in poverty. Anton Safonov, an analyst, said:
"The growing number of those living below the poverty line is connected with high inflation in the beginning of the year. The level of people's salaries and incomes was not growing much. The number of poor people in the country increased, but the level of people's income went down."
A World Bank report noted that poverty was on the increase in Russia.
Poverty levels are a function not just of actual conditions but of the way in which poverty is defined. The Komsomolskaya Pravda daily proclaims in a headline “Poverty has been overcome in Russia!” The "experts" at the Centre for Strategic Research (CSR) used international rules to define poor as anyone earning less than $1.25 a day or alternatively $2.00 a day. According to those criteria there are no people living on $1.25 a day after 2007 as measured against World Bank figures. But even the CSR group recognizes that at most this group would be the destitute and that there are still many Russians living in poverty. They also claim that it may difficult to erase this type of poverty.

No comments: