Trud-7
July 26, 2001
DIRT-CHEAP LABOR
Facing the problem of Russia's working poor
Author: Vitaly Golovachev
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
AN INTERVIEW WITH YEVGENY GONTMAHER, ECONOMIC ANALYST. THE AVERAGE
WAGE IN RUSSIA WAS 3,000 RUBLES A MONTH IN APRIL AND ABOUT 3,300
RUBLES ($112) A MONTH IN JUNE. MANY MILLIONS OF WORKERS ARE LIVING
BELOW THE POVERTY LINE; THE SITUATION IS IMPROVING, BUT ALL TOO
SLOWLY.
"Global poverty, the current scourge of three billion people on
the Earth, poses a hazard to the common social structure and safety of
the international community," asserts James Wolfensohn, former
president of the World Bank. In the next 25 years the population of
developing nations is expected to grow by another two billion people.
If snowballing global poverty is not ended, then, according to the
well-known economist, "we will fail to cope with a wave of asperity,
indigence, and despair".
Much is being spoken nowadays about the plans to urgently raise
salaries of Russian state employees, pensions, and welfare payments.
But does the government have a long-term strategy of combating
poverty? We interviewed Yevgeny Gontmaher, Ph.D. in economics, who
chairs the Social Development Department within the Cabinet
administration.
Question: To begin with, could you give the exact number of
Russian citizens living below the poverty line? Media reports offer
contradictory figures, but official data have not yet been published
this year.
Yevgeny Gontmaher: The reason why there have been no official
reports about the poverty level in Russia is that the law on the
consumer basket (which serves as the basis for calculating the living
wage) had been designed to operate for one year, and expired in
December 2000. Such a short term was chosen because in case of
necessity (high inflation or other unforeseen factors) the government
could alter the set of goods and services.
However, specialists do not consider it necessary to make any
alterations in the consumer basket in 2001 or 2002. The Cabinet
submitted corresponding documents to the Duma requesting extension of
the law. As usual, the Duma procrastinated a lot, so a new law had
gone through all the three readings only by June. On July 13 it was
signed by the head of state. The composition of the consumer basket
remains unchanged. Now the Cabinet needs to make calculations, after
which the official report you have asked about will be published.
Question: But does the Cabinet know at least some rough figures?
Gontmaher: According to a preliminary appraisal by the Economic
Development and Trade Ministry, in the first quarter of 2001 the per
capita living wage amounted to 1,396 rubles a month; in the second
quarter this figure was 1,507 rubles. If we proceed from these rough
appraisals, then 54.4 million Russian citizens were below the poverty
line in the first quarter and 42 million in the second quarter - a 12
million drop is something to be proud of. This trend is stable - the
scale of poverty in Russia is diminishing. In comparison: in the first
quarter of 2000 about 60 million citizens were living below the
poverty line.
We have taken only the very first steps. Paradoxically, poverty
is becoming especially acute now, when the economy has already started
to revive. Today, against the background of the slight economic growth
and a considerable increase in the living standards of tens of
millions of Russian citizens, the utter poverty of their compatriots
strikes the latter especially severely.
Apart from the humanitarian aspect there is also a merely
economic one. Further economic revival in Russia should to a great
extent rest on growth of the consumer demand.
There will always be people unable or unwilling to work:
vagrants, refugees, alcoholics, drug addicts, the disabled, etc. There
is even a special term for this category: natural poverty. In Germany
this natural poverty amounts to 7% of the population, in Sweden it is
5%, in the US it's 20% (but only 7% among white Americans). In
general, the average level of natural poverty in the majority of
developed countries does not exceed 10% of the population. In Russia,
the figure is 30%. Another cause of concern is the composition of the
poor stratum of society, atypical compared with the rest of the world
since working people account for a fair share of the poor in Russia.
This is a completely abnormal situation, when workers can't even live
on their own wages, let alone support a family.
No less than half of Russians living below the poverty line are
workers. This is absurd! In general, over 20 million workers are
living in poverty. Specialists call them the "Nouveau Poor", by
analogy with the "Nouveau Riche". This situation is not found in
developed nations.
Question: But there are also shadow incomes...
Gontmaher: There certainly are shadow incomes, including in the
form of individual garden plots. If it weren't for these gardens,
millions of Russians would have starved long ago. However, we can't
call it normal for surgeons, for example, to be rushing off to weed
their gardens after a long and complicated operation. This can be a
hobby but not a means of survival.
Here are some average wage figures for April 2001:
190,000 workers earned 100 rubles or less per month;
1 million workers earned between 100 and 200 rubles per month;
2.5 million earned between 200 and 400 rubles per month;
3.3 million earned between 400 and 600 rubles per month;
3.5 million earned between 600 and 800 rubles per month;
3.5 million earned between 800 and 1,000 rubles per month;
6.8 million earned between 1,000 and 1,400 rubles per month.
These incomes are lower than the living wage. I will not give you
all the figures, but I should note that about 9 million Russian
workers earn between 5,000 and 10,600 rubles a month, and another 2.5
million earm over 10,600 rubles a month. The average wage in Russia
was 3,000 rubles a month in April and about 3,300 rubles ($112) a
month in June.
As soon as next year, the wages of state-sector employees will be
doubled. In the private sector, wage rises will be covered by an
increase in productivity and upgrading of machinery. Inefficient
enterprises will have to be shut down and employees thus freed will be
retrained. Development of small businesses is another important
reserve. Here we may expect considerable progress after the final
adoption and fulfillment of a packet of bills on deregulation and
continuation of the fiscal reforms, recently submitted to the Duma by
the president and Cabinet.
It is the state's task to raise wages of state-sector employees.
Question: When will the minimum wage become equal to the living
wage?
Gontmaher: I think this will happen no earlier than 2005.
According to expert forecasts, by then the living wage and the minimum
wage will be equal, at between 2,000 and 2,300 rubles a month.
(Translated by Andrei Bystrov)
Serbian News Network - SNN
[EMAIL PROTECTED]
http://www.antic.org/
