In Russia for the first time since the crisis, recorded growth of inequality

In Russia for the first time during the current economic recession, recorded growth in income inequality of the population. As shown by the data of Rosstat published today, the Gini coefficient — the most common indicator in the world of stratification — in the first half of 2016 increased to 0,399 compared to 0,396 in the first half of 2015. Prior to this, starting from the first half of 2013, the figure for the past three years declined. In the first quarter of 2016, the Gini coefficient was equal to 0,392, previously reported by Rosstat.

The share of income of 20% of the poor population in Russia declined in the first half of 0.1 percentage points (to 5.6%, compared with 5.7% a year earlier), while the share of income of 20% of the richest citizens increased by 0.2 percentage points (from 45.7% to 45.9%), follows from the data of Rosstat.

Growing inequality is the tendency of the current crisis, the Director of the Institute of labour and social security Ranhigs Alexander Safonov. In 2008, in the midst of the crisis, the government took a decision to increase salaries by 30%, real incomes are declining because of lack of funds in the budget for social assistance, says Safonov. The government has frozen wages in the public sector, adds chief economist at Alfa Bank Natalia Orlova. Nominal wages, according to Rosstat, grew in the first half of 2016 7.8% (year-on-year), but in the public sector, they are growing less than the national average — only 5 to 6% year-on-year, says Orlov.

The Gini coefficient varies from 0 to 1, the closer the value is to zero, the more evenly distributed the incomes. The income inequality is subject to seasonal fluctuations, therefore, the most representative data on the results of the full year, when account is taken of all quarterly and annual bonuses, seasonal fluctuations in wages, dividends, etc.

In 2015, the Gini coefficient in Russia was 0,412, a decrease compared to 2014 (0,416). The consumer price index in November 2012, and its maximum in Russian history, it reached in 2007.

“Unfortunately, the economy is set up so that the part of the population that previously received a high income, or associated with government contracts (in particular, this concerns military-industrial complex), or is a contractor engaged in construction. They have volume or fall of income is not as significant as it is typical for business organizations. It turns out that some people lose income, part of it remains. Of course, the Gini coefficient begins to increase,” says Safonov. In addition, the most wealthy part of the revenue was denominated in dollars, and in connection with the fall of the ruble, their income only increased.

In parallel, a growing number of people living below the poverty line (those with incomes below the subsistence minimum). If in the last crisis, at the end of 2008, there were 13.4% of the total population (or 19 million people), now the prevalence rate is 15.7 per cent (the poverty line is 22.7 million). It is a growing gap between rich and poor may explain paradoxical, at first glance, the fact retail sales in the country continue to fall, despite the rise in real wages. While wages adjusted for inflation rose for four of the past five months, the fall in retail trade has remained around 5% since the beginning of 2016, wrote last week to Bloomberg. Salaries can increase for those people, who consume, on the other hand the people who could consume more, wages are not growing, says Orlov.