Russians Are Struggling With Income & High-Interest Debt

Credit: Hello Angkor

The Russian economy has been hit hard in recent years by low oil prices and sanctions.

Despite a small increase in average monthly salaries in the country, half of Russian workers are now making less than $550 per month. The quality of life has been declining in Russia and stagnation in disposable income is the main culprit. According to Rosstat, the Russian State Statistics Service, the median income in Russia was 34,335 Rubles per month in April. The overall nominal monthly income was 46,300 rubles per month for January-June 2019, up 7% over January-June 2018. The Rosstat survey also revealed that 0.1% of Russia’s working population is making over 1 million Rubles ($15,400) per month. On the other end, about 775,000 working Russians earned less than the minimum wage of 11,280 Rubles ($173.74) per month.

Rosstat also calculates the salaries of employees at large and medium-sized enterprises each month. Right now they don’t have an exact figure, but it’s suspected that the median wage would be even lower if you take these employees into consideration. “The median wage would be even lower if you take into account all enterprises,” said Vladimir Gimpelson of the Higher School of Economic’s center for labor market studies. About 14 million Russians currently work at small and micro-sized enterprises. “If they’re included in the calculation, they’ll pull the average and median lower down,” economist Yelena Yegorova explains.

One of the other worrying factors taking hold in Russia is private debt. Because of wages that have recently shrunk, Russians are increasingly relying on loans to push by. High interest rates on these loans are making the situation worse for many Russians.

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