Why Most Russians Will Stay Home for New Year’s

Why Most Russians Will Stay Home for New Year’s
As Incomes Crumble, Even Celebrating with Friends Is Too Expensive for Them
Vladimir Ruvinsky
Vedomosti
December 27, 2018

New Year’s, apparently, has become a truly stay-at-home holiday. The number of Russians who plan to spend the long New Year’s holiday at home has jumped from 41% in late 2015 to 70% in late 2018, according to a survey by Romir, a Russian research company. The main reason is the rapid return to the conservative tradition of growing poverty and uncertainty in the future, combined with the desire to maintain previous levels of consumption of the most vital goods and services, which no longer include a winter holiday away from home.

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“How do you plan to spend the upcoming New Year’s holidays?” Overall: at home, 70%; at dacha, visiting relatives, 19%; traveling in Russia, 2%; working, 6%; traveling abroad, 2%; other, 1%. Average monthly income per family member of 10,000 rubles: at home, 73%; at dacha, visiting relatives, 18%; traveling in Russia, 2%; working, 6%. Average monthly income per family member of 10,000 rubles–25,000 rubles: at home, 74%; at dacha, visiting relatives, 17%; traveling in Russia, 1%; working, 5%; traveling abroad, 1%; other, 1%. Average monthly income per family member of 25,000 rubles or greater: at home, 56%; at dacha, visiting relatives, 25%; traveling in Russia, 4%; working, 8%; traveling abroad, 5%; other, 2%. Source: Romir, December 2018. Courtesy of Vedomosti

Surveys of the same representative selection of respondents have shown a drop-off in all other ways of spending the New Year’s holidays, which have basically become yet another period of time off work for Russians. The number of Russians planning to spend the holidays at the dacha or visiting friends or relatives has decreased from 34% to 19% in three years. Trips within Russia have dropped from 8% to 2%, while trips abroad have fallen from 4% to 2%.  Nearly everyone has been scrimping, including Russians with above-median incomes. Fifty-six percent of Russian with monthly incomes of 25,000 rubles [approx. $364] per family memberwill stay home, as will 74% of Russians with monthly incomes between 10,000 rubles and 25,000 rubles per family member. As Tatyana Maleva, an economist from RANEPA, notes, the Russian urban middle class, which has grown accustomed to traveling, cannot afford it.

The picture emerging from the survey reflects the mood of many Russians. Since 2014, real incomes have fallen four years in a row, and all indications are they will be shown to have fallen in 2018 as well. According to Rosstat, the monthly modal income in in 2017 was 13,274 rubles [approx. $233], while the monthly median income was 23,500 rubles [approx. $412]. Given these circumstances, the ruble’s devaluation, which has made trips abroad more expensive, is not such an important factor. In December 2015, one dollar cost as much as it does currently, 67 rubles, and its value was rising.

Holidays at home are not cheap, either. In November 2018, the percentage of Russians who had noticed a rise in prices had grown in comparison with October 2018, according to the Russian Central Bank. Forty percent of Russians noticed upticks in prices for meat and poultry; 32%, rises in the price of petrol; 28%, rising prices for cheese and sausage; while 26% had noticed that milk and dairy products were more expensive. All of these goods are part of the home holiday menu.

In comparison with 2014, consumption levels have fallen. They have not returned to their previous levels. Attempting to wriggle their way out of poverty or maintain their previous income levels, Russians have taken out an ever-growing number of consumer loans, which have proven difficult to pay back. Every fourth Russian who had outstanding loans in 2015–2017 spent 30% of their incomes paying them off, note Olga Kuzina and Nikita Krupensky, economists at the Higher School of Economics, in an article entitled “The High Debt of Russians: Myth or Reality?” published in the November 2018 issue of the journal Voprosy ekonomiki.

Generally, the Russian populace has transitioned to a minimalist model of consumerism, notes Maleva. Scrimping begins literally with the New Year. As Romir’s survey indicates, this transition has become a trend that will, apparently, shape the strategies and tactics of Russian consumers in the future, too. The only thing that has not changed over the years is the president’s televised New Year’s greeting: it costs nothing.

Translated by the Russian Reader

The Decline Has Gone Uphill

Silhouette figures trying to keep a ten-ruble in the air next to an inscription that reads, "Not everything is in our hands." Petersburg, May 23, 2016. Photo by the Russian Reader
Silhouette figures trying to keep a ten-ruble coin in the air next to a stenciled inscription (left) that reads, “Not everything is in our hands.” Petersburg, May 23, 2016. Photo by the Russian Reader

Russia Level with Kazakhstan in Wages
Maria Leiva
RBC
May 24, 2016

In 2015, the average Russian salary, in terms of US dollars, was equal to the level of wages in Kazahkstan, according to data from the Higher School of Economics (HSE). Compared to 2014, the salaries of Russians dropped by almost a third last year.

The observed decline in wages in Russia has led to their drawing level, late last year, with average wages in Belarus and Kazakhstan in previous years, experts at the HSE have calculated in their May monitoring of the populace’s socio-economic status and social well-being. Computed on the basis of exchange rates, the average wage in Russia last year was $558 a month, which is lower than the 2014 level by 34% or more than a third. By way of comparison, in Kazakhstan and Belarus, the average monthly wage, calculated using the same method, was $549 and $415, respectively.

From 2011 to 2015, Russia had the highest level of wages in the CIS, but in 2014, compared with 2013, it dropped by nearly 10%, from $936 to $847. The experts at the HSE note that the gap in economic performance indicators between Russia and certain CIS countries has been constantly contracting. For example, the average salary in Armenia in 2008 was around 52% of the 2015 Russian wage, but by the end of the period in question, it had grown to 60%. During the same period, Belarus has gone from 61% to 75%, and Tajikistan, from 17% to 26%. However, over the same period, the relative positions of Azerbaijan, Moldova, Ukraine, and Kazakhstan have declined.

If we compare the average wage in Russia and Central and Eastern Europe, the wage in those countries has exceeded the average in Russia for the past five years. Thus, last year, the average Russian wage came to 60% of the average wage in Hungary, and 50% of the average wage in the Czech Republic. However, in 2015, Russia came close to the level of wages in Bulgaria during 2013–2014.

Trends in the average monthly wage in Russia, Brazil, and China over the past five years show that wages in Brazil were higher than in Russia last year. Despite the fact that data on wages in China for 2015 have not yet been published, the figures for Russia in 2015 were lower than for China in 2012, 2013, and 2014, indicating the gradual reduction of the gap between the two countries in terms of this indicator.

Last week, Sberbank also reported a fall in the average monthly Russian wage below China’s average wage. The bank’s principal analyst, Mikhail Matovnikov, cited data that the average monthly wage of Russians had fallen below $450 a month, lower than that in China, Poland, Serbia, and Romania.

Translated by the Russian Reader. Thanks to Valentin Urusov for the heads-up.