Section 4. Social Sphere 4.1. The Population’s Finances and the Consumer Market Money incomes. The year 2006 saw continuing growth of the population’s real money incomes, which had begun in 2000 – a post crisis year. During 2000– 2005, the growth rate of real disposable incomes of the population against the pervious year’s level was fluctuating between 10% and 15%, and in the first half year 2006 it amounted to 11.2%, while in the year 2006 as a whole – to 10%.
In the three past years, the same month by month “picture” of income fluc tuation was repeating itself: in January, the real incomes of the population, owing to the typical January leap of inflation and decreased economic activity, on the one hand, and large scale payments to the population in December, on the other, are only slightly higher than 50% of the December incomes. Then, in the first and sec ond quarters, a rather slow growth of incomes can be seen, in the third quarter and during October November almost no growth of incomes can be seen, and in De cember one more leap occurs. Growth of incomes in December by comparison with November is more than 40%, while growth of salaries is relatively lower – ap proximately 25%, and so accelerated growth is demonstrated by property in comes, and incomes from entrepreneurial activity, and other incomes.
On the whole, in 2006 the average per capita incomes of the population, com puted by month, amounted to 9,911 roubles (in December – to 14,757 roubles).
Due to a number of equalizing social allowances (being paid within the framework of the ongoing “monetization of privileges”), the interregional differentiation of in comes was somewhat leveled: thus, e. g., the average per capita incomes regis tered in the city of Moscow were in September 2006 by 3.5–6.4 times higher than the corresponding induces computed for the oblasts within the Central Federal Ok rug, while a year earlier this ratio had been 4–6.8 times. The interregional differen tiation of incomes remains the highest in Moscow – the difference between the in comes of the most prosperous 20% and the least prosperous 20% of the population is greater than by 20 fold; this ratio in also increasing in other oblasts of the Central Federal Okrug, but it is still no greater than 6–7 fold.
Real wages in the first half year 2006 increased by comparison with the cor responding period of 2005 by 12.3%, while during that year as a whole – by 13.5%.
The growth rates of real wages in 2006 by were 3.5 p.p. ahead of the growth rates of the population’s real incomes. Throughout the year, arrears of wares were de creasing, alongside the decline in the number of employed, which in 2006 was 600,000 against 1,300,000 in December 2005. The interregional differentiation of wage levels was somewhat less prominent than the differentiation of incomes – the gap between the leader region (Chukotskii Autonomous Orkrug) and “the outsider” region (Dagestan) was by 5 times.
RUSSIAN ECONOMY IN trends and outlooks Table The structure of money incomes of the population in 2000–2006 (in %) 2000 2001 2002 2003 2004 2005 Total money incomes 100 100 100 100 100 100 Incomes from entrepreneurial activity 15.4 12.6 11.9 12.0 11.7 11.4 11.Wages 62.8 64.6 65.8 63.9 65.0 64.8 66.Social payments 13.8 15.2 15.2 14.1 12.8 12.9 13.Property incomes 6.8 5.7 5.2 7.8 8.3 8.9 7.Other incomes 1.2 1.9 1.9 2.2 2.2 2.0 2.Source: the Rosstat.
The share of wages in the structure of money incomes was found to be the highest since 1992 (Table 1). In a majority of Russia’s regions in 2006 (September data, with the exception of Moscow, St. Petersburg, Samara Oblast, Tambov Oblast and Volgograd Oblast, Perm Krai, the Republics of Bashkortostan and North Osetia Alaniya), average wages were higher than average per capita incomes, al though in Moscow – due to a fundamentally different structure of incomes – it amounted to only 60% of the level of average per capita incomes. It should be noted that in recent years the ratio of average wages to average per capita money incomes became higher – mainly because of the shrinking share of the so called “unobservable” economy (in 2005 it was53 %, while in 1997, prior to the crisis, – only 41%).
The inter branch differentiation of the average wage levels by type of eco nomic activity decreased, as compared to the year 2005. The status of those em ployed in the public health care system became markedly better – by late their wages already amounted to 78% of the average Russian level, while a year earlier to only 70%. At the same time, during the analysis of statistical data it was taken into account that, from January 2006 onward, the Rosstat began to publish data by “pure” type of economic activity, generated on the basis of the information submitted by organizations by each of their actual type of activity. In 2005, the data were distributed by “economic” types of business activity, when the information concerning all the types of activity being carried out by an organization was linked to its main type of activity.
In 2006, the material status of pensioners, by comparison with that of the em ployed, was steadily becoming worse. The ratio of the average pension to the aver age monthly wage, which decreased in the previous years from 31.6% in 2001– 2002 to 27.6% in 2005, by the Q III 2006 had gone down to 25.6% (which roughly corresponds to the ratio that existed in the post crisis year 1999) At the same time, the purchasing power of pension increased, as compared to the early post crisis period: while in late 1999 the average pension was by 25% lower than the subsis tence level of a pensioner, in late 2006 in the central areas of Russia, where the of ficial subsistence level is computed, it was already approximately by one quarter higher than that same index.
The ratio of the average wage to the subsistence level of the employable population in 2006 somewhat improved – thus, e. g., in Q III 2006 in Moscow it Section Social Sphere amounted to 3.2, having been 2.8 a year earlier, while in St. Petersburg – to 3.and 2.99, respectively.
The poverty level and the degree of inequality of the population by income level in Russia are noticeably higher than in the developed world and the countries of Central Europe. The results of household surveys published by the Rosstat have demonstrated that the year 2006 once again saw the resumption of growth of the population’s inequality by income level, and the share of the highly prosperous population in society’s total income become larger. The prices of commodities and services constituting the subsistence basket were growing more rapidly than the general consumer price index. In this connection, accelerated growth was ob served both in respect of foodstuffs and non food commodities, and particularly – that of tariffs on services. Throughout 2006, a rather sharp rise in the value of the subsistence level occurred. On the whole during that year, the subsistence level in those regions where that index was computed grew approximately by 20 % (Q III 2006 against Q III 2005) In 2005–2006, the procedure applied in Russia for computing the subsistence level was changed, after the enactment of Federal Law of 31 March 2006, No. 44 FZ, “On the consumption basket on the whole in the Russian Federation”. However, despite the requirements established by the law, the Government of the Russian Federation did not approve the new Methodological Recommendations for deter mining the size of the consumption basket for the main socio economic population groups across the Russian Federation and in subjects of the Russian Federation.
As a result, at the federal level no official subsistence level index in 2005–2006 was established.
Presently, the average annual subsistence level indices in Russia are estab lished by the bodies of state authority of the Federation’s subjects, while no cen tralized control over the uniformity of approaches, to be applied by regional au thorities when establishing the poverty criterion, is practiced.
The differences in subsistence levels by regions cannot be explained exclu sively by the differences in the levels of prices only. Another reason is that in accor dance with Russian legislation the commodity composition of the consumption basket also varies by regions. The territorial variances in the composition of the consumption basket depend on the differences in the population’s actual needs, which, in their turn, depend on the differences in nature and climate, territory size, availability of social institutions, transport, communications, national and regional consumption patterns, and other factors.
In Q III 2006, the lowest subsistence level indices were established in Dages tan, Tambov Oblast, Lipetsk Oblast and Orel Oblast, in Kabardino Balkaria, North Osetia Alania, Kalmykia and Karachaevo Cherkessia – between 2,416 and 2,roubles per month per capita. The highest indices were registered in Koriak Autonomous Okrug and Chukotskii Autonomous Okrug – 9,232 and 8,147 roubles, respectively.
The latest official data concerning the numbers of the poor, obtained on the basis of the subsistence level established by the Government of the Russian Fed RUSSIAN ECONOMY IN trends and outlooks eration in 2004 (no legitimate subsistence level index having been established for the year 2005 in Russia) offer the estimate of 25.5 mln, or 17.6% of the country’s total population. However, if the estimation is based on the number of this popula tion category generated as the sum of those groups that can be established on the basis of the subsistence level indices approved by the authorities of subjects of the Russian Federation, the result will be by 5 mln higher.
Poverty levels in Russia widely vary by regions. The highest poverty levels (more than one half of total population) were registered in Ust’ Ordynskii Buriatskii Autonomous Okrug, the Republic of Ingushetia, and Komi Permiak Autonomous Okrug. The least poverty can be observed in the cities of Moscow and St. Peters burg, the Republics of Komi and Tatarstan, and in Yamal Nenets and Khanty Mansi Autonomous Okrugs.
In this country, poverty is more typical of rural areas: the share of rural popu lation among the poor is higher than among those who are not poor, and amounts to 60%. Among the poor, the share of families with children is also high: thus, among the families with both parents and 1–2 children the poor constitute more than 50%, while among the families with 3 children or more – three quarters.
Among single parents with three or more children the poor constitute 85%. Two thirds of temporarily unemployed and more than one half of all recipients of disabil ity pensions belong to poor families. In the structure of the poorer strata of the population, the share of employable persons who work but cannot earn enough to provide adequately for themselves and for their dependents is rather prominent.
Money expenditures and retail turnover. In 2006, the share of the popula tion’s expenditures on commodities and services, as a percentage of the total in comes the population, remained virtually unchanged (in January through Novem ber 2006 it amounted to approximately 72.0%, just as one year earlier). During the same period, the share of the population’s savings became slightly lower, while the share of expenditures on the acquisition of hard currencies during the same period decreased rather noticeably (from 8.5% to 7.4%).
Growth in retail turnover (in terms of mass of commodities) remained stable and high in 2005–2006 – at the average level of 12–13% per annum. The highest growth against the previous year’s level was achieved in Q IV primarily due to the December leap (growth of commodities turnover in December against the Novem ber level is approximately 20%). The structure of commodities turnover demon strated a certain decrease of the share of nonfood commodities – from 46% in 2005 to 45.5% in January through November 2006 (less than 45% in Q IV 2006). In the subgroup “foodstuffs”, in recent years the share of alcoholic beverages be came noticeable lower from 10.5% in 2002–2003 to 9% in 2006. The year also saw decreased consumption, as compared to 2005, of vodka and grape based wines, while at the same time, during the same year the consumption of beer in creased by 12%, and that of champagnes and sparkling wines – by 8.5%. In 2004– 2006, the share of consumption of beer, champagnes and sparkling wines (in ab solute alcohol values) grew from 26% to29 %.
Section Social Sphere In the group of nonfood commodities, the most noticeable growth was dem onstrated by sales of motor cars, whose share in total commodities turnover in 2006 was approximately 10% (in 2005 – approximately 8.5%).
In the total volume of retail turnover growth in 2006 the highest share was rep resented by growth in the turnover of trading organizations – it increased by 15%, while market turnover volume increased by 5%. Resulting from the implementation of new measures in the sphere of migration policy in 2007 (the restriction of, and then a ban on trading by foreigners at retail markets), one can expect further ac celeration of turnover growth in the stationary retail network, alongside a noticeable shrinkage of turnover at retail markets.
4.2. Labor Market Between 1999 and 2006 the labor market displayed an overall favorable dy namic determined by positive trends to growth in main macroeconomic indicators.
Main indicators of the state of the labor market likewise displayed positive dynam ics. High rates of economic growth have had a positive impact on the labor market.
Specifically, the level of employment and real salaries and wages were on the rise;
new job opportunities arose and workforce was used more vigorously. Concomi tant the economic upswing was a considerable rise in labor productivity. The vol ume of wage arrears fell drastically, while since 1999 real salaries and wages have been growing at a pace greater than the production growth rates.
Labor supply (the number of the economically active population) (see Table 2) also posted growth during the period in question. Interestingly, it proved to be greater for women than men.