A year ago, it was thought almost obvious that the average Russian would suffer ruin and poverty as a result of the war and sanctions. But there has been no collapse in standards of living.
A consumer survey
recently published by the state statistical agency (Rosstat) shows that the majority of Russian households (56%) have not seen the deterioration of their financial situation over the last 12 months. Of those surveyed, 33% noted a deterioration, while 11% observed an improvement.
Expectations for the coming year are even less pessimistic. Discussing expectations, the share of neutral responses increases to 66%, the share of negative responses decreases to 22%, and the share of positive responses remains the same (11%). The average Russian definitely does not consider the deteriorations in his standard of living to be fatal — and also thinks that the worst is already behind him.
Technically speaking, the average Russian has reason to think this. According to official calculations
, real incomes decreased by just 1% in 2022. The decline
in real wages was just as modest. Moreover, in the first months of 2023, incomes and wages halted their downward trajectory.
To get a more complete picture, however, we must recall that the recent decrease in income was only the latest in a series of declines that began back in 2014, the year of the annexation of Crimea, the first wave of sanctions, and the fall in oil prices. As a result, Russians’ real income in 2022 was
lower than in 2011. And the pullback was even deeper. Due to fears related to the war, consumer spending by residents of Russia fell much more dramatically than their incomes following the invasion of Ukraine. Retail turnover fell by 10.5% in December
2022 compared to December 2021 and by 6.7% in January 2023 compared to January 2022. At the end of last year and the beginning of this year, purchases of goods were at about the same level as 2008
. The past 15 years, then, have not brought residents of Russia any growth in prosperity at all.
It is commonly thought that income stagnation is nothing new and does not require much explanation. But behind the figures showing a general stagnation of incomes are dramatic changes in Russian everyday practices and in the well-being of certain groups of Russians. The militarist prize
The Institute for Social Policy at the Higher School of Economics (Moscow) has compiled
four scenarios for the current decade — from the best possible for Russia (easing of external sanctions amid global economic growth) to the worst (tougher sanctions amid global stagnation).
All four promise, by 2030, "an increase in the concentration of wealth with, and further detachment of, the ‘top,’ on the one hand, and, on the other hand, a reduction in inequality from below by bringing the middle (or formerly middle) strata closer to the poor, with a certain stability in the depth of poverty." Only the degree of these changes varies from scenario to scenario.