Economist: “30-50-year-old Russians have no idea what a destitute future awaits them!”
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Economist: “30-50-year-old Russians have no idea what a destitute future awaits them!”

20 July , 19:59
At least 50-60% of Russian citizens under the existing social system will be deprived of even the current beggarly pensions.

Doctor of Economics, Professor, Honored Economist of the Russian Federation Valentin Roik deals with issues of income, social protection, as well as conditions and labor protection of the population of Russia. This spring he made a report explaining the causes of poverty of Russian citizens.

As you know, poverty is a complex social phenomenon, it is objective in nature and subjective in nature. This is a state of material insecurity of people, when the income of a person or family does not allow maintaining the physiologically and socially necessary consumption for life and impedes the normal existence and development of the individual.

It is usually evaluated using a differentiated approach:

  • child poverty,
  • poverty of employed and unemployed,
  • poverty of pensioners.

Causes of poverty, experts say:

  • child - low family income
  • employed - low qualifications, low wages
  • unemployed - lack of effective insurance institutions for reservation of earnings

In his report, Roik lists the causes of this social phenomenon that are specific to Russia:

- Net fixed wages in economically developed countries (EDC) account for 40-45% of GDP; in Russia - 21% of GDP; for social insurance purposes in the EDS - 20-25% of GDP, in Russia - 9% of GDP. Aggregate labor costs: in the EPC -50-60% of GDP, in Russia -30% of GDP.

- The share of net wages and transfers in favor of employees on average in the EU member states is more than 51% of GDP, while in the USA it is close to 59% of GDP. In the USSR, this share was close to the average in the EU countries. In Russia, it is significantly (1.7 times) less.

- The consequences of such a policy were a paradoxical situation, when often in Russia two workers cannot feed two children, and 40% of workers cannot earn an acceptable size of labor pension over 35 years of work.

The main causes of poverty in Russia are low levels of income from employment, which is associated with:

1. With the processes of globalization that caused the de-industrialization of the Russian economy.

  1. With the change in the "matrix" of labor relations - a decrease in the share of labor on a permanent basis; instead of an open-ended employment contract for hired workers comes part-time and temporary employment, agency work.
  2. With the deregulation and growth of wage differentiation: the ratio of wages in extreme deciles is 1 to 17, in Soviet times - 1 to 4.5.

- A 40 percent group of employed Russians for a 35 year period of labor activity will not be able to earn their pensions at the level of even a living wage of a pensioner.

A change in the nature of social and labor relations in Russia led to the following conditions for the functioning of labor activity:

- Shadow labor market - 25% of the total number of employed.

- Short-term and temporary employment - 20%.

Part-time work, temporary employment - 15%.

- Permanent and stable work is not more than 50% of employees.

From all this data, Roik draws an extremely simple conclusion.

“At least 50-60% of Russians under the existing social system will be deprived of even the current beggarly pensions (the maximum for them is a social pension in the amount of the current 6-9 thousand rubles). And this despite the fact that Russian society as a whole is aging, and hydrocarbon rent is decreasing. An ordinary 30-50-year-old Russian has no idea what the future holds for him..."

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As one of the readers rightly remarked: “If these figures are correct, then the only explanation is the super-high tax burden and the withdrawal of money from turnover to the budget with the subsequent withdrawal to the EDС...”

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