Russia’s Working Poor

Employed and Poor
Andrei Bespalov
Takie Dela
December 13, 2017

According to official statistics, at least ten million Russians work hard all their lives but cannot escape poverty. 

Russia has no clear criteria for poverty. The concept is absent from Russian legislation. There are poor people throughout the world, but not in Russia. We vaguely define them as “low income,” meaning people whose income is below the subsistence level. Each region of Russia has its own subsistence level. For example, for a person of working age to make it for a month in Omsk Region, he or she needs at least 9,683 rubles [approx. 140 euros]. In Moscow, the minimum income is twice as high: 18,472 rubles [approx. 267 euros]. If your income is lower than the officially approved subsistence level, you are living below the poverty line. True, this in no way mean you cannot be paid less this same minimum for your work. You can indeed be paid less: if your monthly wage exceeds the minimum wage at least by one kopeck. Currently, the minimum monthly wage in Russia is 7,800 rubles [approx. 113 euros].

Story No. 1: Olga
We imagine you have go looking for poor people far from Moscow, and the farther you get from Moscow, the more flagrant poverty you will encounter. It is not true. There are large numbers of people living below the poverty line in the capital. I should emphasize that, in this case, we are talking Russian nationals, not about migrant workers from the former Soviet republics.

Take Olga. She works in a lab at Moscow Medical University. In her fifteen years there, she has risen from senior lab assistant to head of the lab. Olga’s monthly salary is 12,000 rubles [approx. 173 euros], and it is her entire income.

True, she gets the occasional bonus, but they come “a little more often than once in a lifetime.” Ordinary lab employees are paid 11,000 rubles a month [approx. 159 euros]. Such salaries are hardly a rarity in Moscow.

Olga was educated as a programmer. She graduated from Bauman Technical University, but she has not worked as a programmer for a long time. She believes she cannot catch up and has lost her qualifications. Olga worked as a programmer before her children were born. Her family had enough money for everything, and besides, she had the opportunity to earn money part-time. When her maternal leave was up, she was unable to go back to her old job: her department has been disbanded. She was able get the job in the lab at Moscow Medical. Olga likes everything about the job—her colleagues respect her, and her work team gets along well with each other—except the salary. Management occasionally permits her to work from home. This is good for Olga: she does not have to spend money on commuting. (Olga lives in Moscow Region, not in the city.) This comes to around 300 rubles [approx. 4 euros] a day for the trip to the city and back on the commuter train and a round trip on the subway to the university.

When her children were small, Olga did not try and find better-paid work, and when they were older, she tried, but was turned down everywhere she applied. To her surprise, she realized no one wanted to hire a woman in her forties.

“First, you can’t find work because of the children, who are constantly ill, and then you can’t find work due to your age. Although what age are talking about? I’m forty-five!”

Olga had wound up in the category of people with no prospects. The only place she could get a job was a school. Olga worked there for several years before quitting. She had never been offered a full-time position, and her monthly salary of 6,000 rubles [approx. 87 rubles] was only enough to pay for her commute.

“I don’t want to leave these folks. It’s easy working with professors. They are quite cultured, decent people. It would be a pity to quit the job. I feel I’ve become a highly qualified specialist over the last fifteen years,” said Olga.

If it were not for her husband, a programmer, she would have a hard time feeding them and their two children. The family of four’s overall income is above the subsistence level, if only by a little. It comes to around 80,000 rubles [approx. 1,155 euros] a month. (The per capita subsistence level in Moscow is 18,472 rubles, meaning Olga and her family make around 7,000 rubles more in total than the subsistence level.) It was their good fortunate both her sons were admitted to university as full scholarship students. Olga and her husband would definitely not have been able to pay their tuition.

Olga’s family took out loans to improve their living conditions. They started out in a room in a communal flat and, after several steps, moved into their own two-room flat. However, they had to rent housing for three years, since construction of their apartment building had been postponed. Renting meant additional expenses. Subsequently, Olga had to take oout a loan to fix up the flat in order to move in as quickly as possible. That was five years ago. Of the original loan of 500,000 rubles, they still have 300,000 rubles [approx. 4,300 euros] to pay off. The monthly minimum payment is 20,000 rubles [approx. 290 euros].

In her free time, Olga tries to earn extra money by knitting. She says she is very good at it. But she is unable to supplement her salary by more than 4,000 or 5,000 rubles a month, and this happens extremely irregularly. Olga says a master knitter would have to work all month without taking a break to earn that kind of money. Everyone likes the things Olga knits, but people are willing to buy them if they do not cost more than mass-produced Chinese goods, that is, they are willing to pay the price of the yarn. Olga is not ready to give up her job at the university.

It’s Unique
The poverty experienced by employed people harms the economy and hinders its growth. This was the conclusion reached by the Russian Government’s Analytical Center in a report published in October 2017.

“The poverty of workers generates a number of negative economic and social consequences, affecting productivity and quality of work, shortages of personnel in the production sector, especially manual laborers, the health of the population, and educational opportunities,” wrote the report’s authors.

Olga Golodets, deputy prime minister for social affairs, has spoken of the fact that the working poor have no stake in increasing productivity. Judging by a number of recent speeches, the authorities are aware that grassroots poverty threatens the country. Golodets called poverty among the working populace a unique phenomenon in the social sector. A uniquely negative phenomenon, naturally.

Story No. 2: Nadezhda
Nadezhda works as a history teacher at a technical school in Barnaul. She has been teaching for twenty-seven years, and her monthly salary is 12,000 rubles [approx. 170 euros]. Nadezhda has been named Teacher of the Year several times. The regional education and science ministry awarded her a certificate of merit for “supreme professionalism and many years of conscientious work.”

Nadezhda works with a cohort of students that includes many orphans and adolescents with disabilities: the visually impaired, the hard of hearing, and the deaf and dumb. It happens that her class load is as much as eight lessons a day.

Nadezha and her eleven-year-old son share a room in the technical school’s dormitory. Nadezhda has been on the waiting list to improve her living conditions for fifteen years.

“Last year, I was ninety-fourth on the list. This year, I’m ninety-first. At this rate, I can expect to get a flat in thirty years or so,” she said.

Nadezhda thought long and hard about applying for a mortgage, but she decided against it, although the bank had approved a loan of one million rubles [approx. 14,500 euros]. But what income would she have used to pay back the loan, when the monthly payment would have been 21,000 rubles?

In Altai Territory, where Barnaul is located, 12,000 rubles is above the subsistence minimum, which has been set at 10,002 rubles for the able-bodied population. In addition, the state pays Nadezhda’s son a monthly survivor’s pension of 8,300 rubles after the death of his father. Officials cite this as grounds for rejecting her request that her son should receive additional social benefits. The family’s monthly budget is 20,000 rubles, so they should be living high on the hog from the official viewpoint, apparently.

In 2013, Nadezhda suffered a severe concussion involving partial loss of hearing and eyesight. She was struck by a student high on drugs, she said. She spent over two months in the hospital. Ever since then, she has had to take pills that run her 3,000 rubles a month.

“Working with classes in which there are many orphans is not easy at all. They demand your constant, undivided attention. When I say ‘demand,’ I mean ‘demand,’ and they get that attention. But then conflicts arise with the parents of other children: the class doesn’t consist entirely of orphans. They say I don’t give their kids enough attention.”

Over the course of her life, Nadezhda has never been able to earn enough money to buy a standard 600 square meter dacha plot. Thanks to her former father-in-law, however, she grows vegetables on his plot.

“I hear the call to be a patriot from every radio, TV set, and kitchen appliance. What are you going on about, guys? I have been humiliated my entire life, paid crumbs for a difficult, responsible job. I’m hit on the head by students, and they go unpunished. I’m told to quit if it doesn’t suit me: no one is holding me back. They tell me they will find a way to evict me from the dormitory, although they are unlikely to succeed as long as my son is a minor. I’m a teacher of the highest category, with a certificate of merit from the education ministry. Our family income exceeds the minimum subsistence income by 700 rubles, meaning that officially we are not poor. Thank you very much, it makes life so much easier.”

A Trend
Since 2005, the poverty level in Russia has decreased threefold, note the authors of the study. At the same time, they write, “We cannot recognize as normal circumstances in which over ten million employed people have incomes that do not allow them to provide decent living conditions not only for themselves, but for their families.”

The researchers at the Russian Government’s Analytical Center have noticed a trend in recent years. There have been more people working in needy families, but “this has not vouchsafed their exit from poverty.”

Story No. 3: Igor
Igor Kurlyandsky, a PhD in history and senior researcher at the Institute of Russian History of the Russian Academy of Sciences, cannot be categorized as belonging to the working poor. His monthly salary exceeds the minimum subsistence income for someone living and working in Moscow by 600 rubles. His monthly after-tax income is 19,300 rubles [approx. 279 euros]. There are freelance jobs, of course, but they are irregular and do not change Igor’s circumstances for the better.

“Generally, the salaries at the institute are pitiful. Doctors of Science and senior employees are not paid much more than I am, three or four thousand rubles more,” Kurlyandsky said.

FANO (Federal Agency for Scientific Organizations) is supposed to pay quarterly bonuses based on performance indices, for example, academic publications. But this year, according to Kurlyandsky, FANO has not paid out any of these bonuses, and it has canceled old bonuses as well.

“It’s wrong to demand that scholars publish frequently. They might work for a year in the archives, collecting material for future academic articles. Or they might take several years to write a book. I worked for four years on a book about the relationship between the regime and religion during the Stalin era. I will not be paid a fee for the book. I might get a salary bonus for it from FANO. But whatever it is, if you divided it by four years, it would amount to kopecks. The institute has nothing to do with selling books. Authors earn nothing except complimentary copies.”

According to Kurlyandsky, the Institute of Russian History, one of the principal historical research institutions in Russia, with many wonderful scholars on its staff, is itself a beggar.

“It literally has no money for anything. The state hardly finances it. Of course, for many years, its fellows can travel for business only at the expense of host institutions.”

“If memory serves me, the last time researchers got a raise was around fifteen years ago. Life becomes more expensive, but our salaries stay the same. Over this period there were several spikes in inflation, but our salaries were not indexed. I have to skimp on lots of things,” Kurlyandsky confessed.

Where Are There More Poor People?
If you look at the situation by sector, the majority of the working poor are employed in housing services and utilities, education, culture and sports, agriculture, forestry, and a number of other sectors. The sectors with the fewest working poor are the resource extraction industries, finance, public administration, the military-industrial complex, and social security administration.

Generally, the statistics say that, since 2005, the number of working poor has decreased from eight million to two million, and the percentage of poor people from 24.4% to 7.3%, and this has occurred mainly due to the private sector, not the public sector.

Story No. 4: Svetlana
Forty-four years old, Svetlana works as a senior librarian. She arrived at the library immediately after graduating from a teacher’s college. Twenty years on the job, Svetlana has a huge amount of experience and a monthly salary of 8,300 rubles [approx. 120 euros].

“When I was a student, I imagine my future job as a perfect idyll: silence, lamps glowing on the tables, people reading, and me bringing enlightenment to the masses. It’s funny to remember it. I didn’t think about the money then, of course, but nowadays it’s the thought with which I wake up and go to sleep. My husband teaches at a university and makes a little over 14,000 rubles [approx. 200 rubles] a month. We have two sons in school. My dad is quite unwell, and my husband’s mom and dad are also quite ill. So we earn our 23,000 rubles a month and divide it among seven people. Among seven people, because my dad and my husband’s parents have pitiful pensions, public pensions, despite the fact they worked in factories for thirty years. It’s my perennial puzzle. What should we buy? Medicine for the elderly? Shoes for the kids? Pay off part of the debt we owe on the residential maintenance bill? Buy decent trousers for my husband? I haven’t given myself a thought for a long while. Honestly, I wear blouses and skirts for ten years or so before replacing them. I can’t recall the last time I bought cosmetics.

“Earlier, we bore our poverty more easily, maybe because we were younger. So what there was nothing to eat with evening tea? Who cared that we dressed modestly? It was a style of sorts. We tried to make sure the children had better shoes and clothes.

“The most terrible thing right now is not that we are paid kopecks. My husband used to believe we would struggle through, that we would work off our debt. But then he burnt out. He forces himself to go to work. The children are perpetually dissatisfied, and our parents are always ill. Only I don’t pretend it’s okay, that everyone lives like this. I have caught myself sizing up how people are dressed on public transport, and at the store I look into their baskets. What fruits, meat, and wines they buy! We are always eating buckwheat groats with bits of chicken and meatless soups. I hate the dacha, but it really does put food on our table.

“I have no prospects. I won’t live long enough to be promoted to head librarian, because our head librarian is my age. I lack the strength for side jobs. My real job is not easy: there is lots of scribbling involved. Plus, we divvied up the jobs of the cleaning woman and  janitors, so we either mop the floor or chop ice on the pavement. I crawl home barely alive. Frankly, I don’t see how my life could change, and I’m used to it. What worries me is my sons’ future. I’m horrified when I think that soon they will be applying to university. What if they don’t get full scholarships? We definitely don’t have the money to pay for their educations. So it turns out we have doomed our boys to the same poverty.”

It’s Shameful to Admit
Nearly everyone with whom I spoke when writing this article asked me not to use their real names and places of work. They all made the same argument. First, it is shameful to admit you work for mere kopecks. Second, their bosses would be unhappy and punish them for “disclosing information discrediting the organization.” Many of my interviewees actually had signed such non-disclosure agreements, entitled “Code of Ethics,” at work.

All illustrations courtesy of the artist, Natalia Gulay, and Takie Dela. Translated by the Russian Reader

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Labor ministry: about 13% of Russian population live below poverty line
TASS
December 28, 2017

The number of citizens with incomes below the minimum cost of living is around 20 million people, according to the Russian labor minister

The incomes of about 13% of Russia’s population are lower than the minimum cost of living, Labor Minister Maxim Topilin said in an interview with Rossiya 24 TV channel.

“According to current estimates, the number of citizens with incomes below the minimum cost of living is still around 20 million people, which is 13–13.5% of the country’s total population,” Topilin said.

He noted this is “at least an unpleasant indicator.” The minister attributed this figure to price increases in the last two years and, as a result, the growth of the subsistence minimum.

Topilin stressed the government has already taken the first steps to reducing the number of people with incomes below the subsistence minimum. He recalled that under a law that was adopted recently and would come into effect on January 1, 2018, the minimum wage would rise to 85% of the minimum subsistence level, and to 100% on January 2019.

“For the first time in the history of the Russian Federation, we have managed to bring the minimum monthly wage to the minimum subsistence level,” Topilin said.

NB. This article was lightly edited to make it more readable—TRR.

A Thorn in Their Side

Kushelev-Bezborodko Palace on Gagarin Street, Petersburg
Kushelev-Bezborodko Palace on Gagarin Street, Petersburg, home of the European University

European University Faces Eviction for Plastic Windows
Maria Karpenko
Kommersant
January 24, 2017

The European University in St. Petersburg, one of the leading non-public educational institutions in Russia, may lose its building. Petersburg city hall has unilaterally terminated the lease agreement for the Kushelev-Bezborodko Palace, which has housed the university since 1995. The Smolny claims university management violated the conditions for using the historic building by making alterations and installing windows and air conditioners. Meanwhile, the university had been preparing to reconstruct the palace, investing 2.2 billion rubles in the project, 670 million rubles of which were to be spent on restoring the historic section of the building.

On December 27 of last year, the St. Petersburg City Committee for Property Relations (KIO) sent the European University notice it was unilaterally terminating the rental agreement. As a source at the committee told Kommersant, the European University hd not fulfilled its obligations to preserve the mansion of Count Kushelev-Bezborodko, built in the nineteenth century.

Officials discovered the violations last summer during an unscheduled inspection. (The Smolny could not explain yesterday why the inspection had been necessary.) As a source at the City Landmarks Use and Preservation Committee (KGIOP) informed Kommersant, university officials had made alterations to the premises and installed reinforced plastic windows and air conditioners without providing authorized documentation and obtaining permission for the repairs. The Dzerzhinsky District Court fined the European University 200,000 rubles in its capacity as user of a culture heritage site.

The Property Relations Committee then deemed it possible to terminate the lease agreement. The European University challenged the agreement’s termination in commercial court, arguing it was groundless. The court adopted interim measures, halting the university’s eviction from the premises until a decision has been made on the claim. The first hearing has been scheduled for March 15.

Meanwhile, the European University had planned in the near future to begin implementing an investment project for adapting the Kushelev-Bezborodko Palace to modern educational needs. The university estimates its cost at 2.2 to 2.4 billion rubles, 670 million rubles of which should go to restoring the historic section of the palace. The project has been in the works since 2013. Architect Jean-Michel Wilmotte, designer of the Russian Cultural Center in Paris, won the competition to carry out the project. As European University Vice-Rector Vadim Volkov told Kommersant, the KGIOP had already partly authorized the reconstruction. (Our sources in the KGIOP confirmed that the methods for restoring the interiors of the palace that had artistic value had been approved.) Next week, the university had anticipated the KGIOP’s decision on the entire project.

“Given our intention to implement such an ambitious project, the KIO’s decision to evict us from the building on account of three windows, a plastic partition, and and extension that was erected under Brezhnev looks odd, at very least,” Mr. Volkov said.

The official statement on the university’s website stresses that none of  the violations uncovered during the inspection “put the cultural heritage of the palace at risk. They would be automatically corrected during the adjustment project as mentioned above.”

The statement goes on to say “[t]here is a degree of incommensurability between the claims of the Committee and the consequences entailed by the latter’s tough stance.”

Vice-Rector Volkov likewise noted that the clause giving the city the right to terminate the lease agreement if the university violated its landmark protection obligations had been added to the agreement only in April 2015 at the behest of the KIO.

“First, the KIO inserted these conditions in the agreement, and then showed up to check just this, certain they would be able to turn up violations of some kind,” Mr. Volkov suggested.

Maxim Reznik, chair of the education, culture and science committee in the city’s legislative assembly, believes the claims are politically motivated.

“Apparently, the presence of such a university, when all the rest have long ago been marching in step, keeps someone awake at night. In my view, the situation can be resolved in the university’s favor only if if the head of state [i.e., Vladimir Putin] or people close to him intervene,” the city MP told Kommersant.

In December of last year, Rosobrnadzor (Federal Service for Supervision in Education and Science) suspended the university’s license. The European University appealed to President Putin, who asked Vice-Premier Olga Golodets to get to the bottom of the matter. As Kommersant wrote, officials who attended a closed meeting concluded the claims were unsubstantial and spoke out in the university’s favor. Three days later, its educational license had been restored.

The university first encountered problems with oversight authorities in 2008, when it was closed for a month and a half [allegedly] for fire safety violations. Last summer, the Prosecutor General’s Office inspected the European University at the behest of Petersburg MP Vitaly Milonov. Prosecutors then gave the university two months to eliminate violations.

Translated by the Russian Reader. Photo courtesy of saint-petersburg.com

Ivan Ovsyannikov: Russia’s Welfare Chainsaw Massacre

Russian President Dmitry Medvedev holds

Welfare Chainsaw Massacre
Ivan Ovsyannikov (Russian Socialist Movement)
September 30, 2013
anticapitalist.ru

A “welfare chainsaw massacre” is exactly what we might call the government’s actions and statements over the last few months. The ruling class is once again attempting to pay for the latest uptick in the economic crisis from out of the pockets of workers.

On September 1, while speaking to students at the Far East Federal University, Putin announced the transition to a policy of austerity and reduced social spending. “The world economy has slumped a bit, and ours is hunkering down behind it,” the president said in his typical manner by way of explaining the upcoming unpopular measures. And he supported an earlier proposal, voiced by Minister of Finance Anton Siluanov, to replace the “maternity capital” program with “targeted assistance to poor families.”

However, a few days later, Dmitry Medvedev said that the maternity capital program would not be cancelled. “But it will be modified,” Minister of Labor and Social Affairs Maxim Topilin added in a whisper.

The fact that public opinion has been probed on such a sensitive point is quite significant. The maternity capital program is almost the only widely publicized social achievement of the Putin era. Putin has repeatedly stated it was his idea. And now this essential element of Putin’s social populism has been openly questioned.

No less provocative looking are the experiment with introducing social norms for electricity consumption (see Andrei Zavodskoi, “Cruel Economy”) and the de facto raising of the retirement age, which has long been discussed and is today closer than ever to realization. According to Deputy Primer Minister Olga Golodets, “We are not discussing raising the [retirement] age for any category of workers. We’ve gone another direction by promoting voluntary postponement of retirement. That is our principled position, and the government’s position.” However, such tricks are unlikely to mislead anyone.

The most scandalous revelations, however, are the statements made by government officials concerning labor relations. If, until recently, Mr. Topilin based his ministry’s decision not to index Russia’s penny-ante unemployment benefits on the fact that “at present there remains a high probability of finding employment in the labor market,” Mr. Medvedev has now said the exact opposite. He argues it is time to get away from the policy of preserving employment at all costs and not be afraid of cutting inefficient jobs: “The times all of us now face are not the easiest. […] Some people—perhaps a significant portion of the population—will have to change not only their jobs but also their professions and place of residence.” There is no doubt we have fallen on hard times, but the Prime Minister is clearly disingenuous when he talks about “all of us.” Russia’s ruling elite has no intention of depriving itself of jobs and handsome profits. So, in a conversation with François Fillon, Mr. Putin elegantly hinted that he would “not exclude” the possibility of seeking a fourth term as president.

But has the Russian economy “hunkered down” badly enough to warrant such painful experiments on the population? Isn’t “stagnation” only a plausible excuse for implementing the longstanding plans of the gentlemen from the Russian Union of Industrialists and Entrepreneurs?

As was reported in late August, the Ministry of Finance planned to save 1.1 trillion rubles [approx. 25 billion euros] over three years by eliminating the maternal capital program and reducing expenditures on pensions. At the same time, federal and regional budget expenditures on preparations for the 2018 World Cup should amount to 438 billion rubles, that is, almost half a trillion. The mass protests and riots in Brazil, sparked by excessive government spending on the 2014 World Cup, are still fresh in everyone’s minds. Russians could learn a lesson or two from Brazilians.

But maybe massive sports venue construction projects will generate many new jobs and return the taxpayer money spent on them? No, they will not. Unlike the great construction projects of the Soviet era, when funds were invested primarily in developing production, Olympiads, Universiades, and World Cups are, by definition, loss makers for national governments. Many analysts trace the current economic disaster in Greece to the 2004 Summer Olympics, which enriched transnational corporations while depleting public finances. The London Olympics have also been declared unprofitable. As for the 2014 Sochi Winter Olympics, its unprofitability has been recognized by nearly all serious experts, including Vnesheconombank chair Vladimir Dmitriev, who said in an interview with Vedomosti newspaper that “a serious percentage of [Olympics-related construction] projects are calculated to make a loss.” According to Dmitriev, “Given the current model and market trends, there are big problems with returns on investments. For example, one million square meters of hotel space are being built in the Imereti Lowland. When this space goes onto the market after the Olympics, a sixty percent occupancy rate will be hard to achieve. The costs of many projects have seriously risen as they have been implemented. […] For many sites, there is no complete project documentation or confirmed cost estimates. All this confirms our doubts.”

As for jobs, they really will be generated—for thousands of migrant workers. Federal Law No. FZ-108, adopted specifically for the World Cup, leaves no doubt about that. First, the law establishes special lightweight entry requirements for foreign workers involved in preparations for the World Cup. Second, it limits the applicability of a number of existing labor laws, effectively legalizing slavery. As the Confederation of Labor of Russia (KTR) declared in their statement on the subject, “The potential for runaway importation and recruitment of cheap labor, undermining the national labor market, and leading to a decrease in wages and legal guarantees in the area of labor relations, and an increase in the level of unemployment among the population, has been legally enshrined in the Russian Federation.”

The government could not care less about the fortunes of workers during the crisis, and it does almost nothing to hide it. How else can we account (to cite just one example) for Mr. Topilin’s proposal to deny free health care to all informally employed and unemployed people not registered with an employment bureau?

In light of the foregoing, the Kremlin’s actions aimed at reconciliation with the liberal opposition also become intelligible, as do unexpected initiatives to put the “against all” option back on voting ballots. The authorities fear that public discontent will grow and want to channel it in a direction that presents no danger to the ruling elite. Whether this political maneuver succeeds depends in part on the willingness of leftist political forces and trade unions to win over public opinion and make the fight against austerity measures as much of a mobilizing factor as it has been in Greece, Spain, and other countries facing the consequences of the capitalist system’s crisis.

Translated by the Russian Reader. Photo courtesy of deviantart.net