The working poor make up as much as 16.8% of the working population

1 november 2017 | Vedomosti

A sixth of all people that have jobs in Russia are not earning enough to provide for themselves and their families, writes the Vedomosti newspaper with a reference to the bulletin of the Analytical Center titled The Working Poor in Russia and Abroad. These are people whose income was below the living wage for the working population in 2016. A Vedomosti journalist talked to Analytical Center expert Vladimir Trubin to see if the problem of the working poor could be solved and what was already being done for that in our country.

Vladimir Trubin
Vladimir Trubin
Department for Social Policy

Considering not only wages but also other sources of income and the fact that this income is spent not only on themselves but on family members, the total number of the working poor increases several-fold to about 12.1 million people in 2016 or 16.8% of the working population. Even if more family members come to work, as a rule it does not help them to get out of poverty, Mr. Trubin says. "In order to significantly increase one's income, a person needs to get a new profession, higher level of education or move to a different place, while the labor market, despite the seemingly low level of unemployment, does not provide a sufficient number of vacancies with higher wages and maintaining professional status," the expert believes. "In other words, poverty stimulates employment, which in turn does not result in increased income and escaping poverty."

The main problem is that the minimum wage must not be below the living wage for the working population, that is actually a requirement of the Labor Code, which has been violated for years, the bulletin notes. "The thing is that this required was supposed to have been included in relevant federal laws but no such laws were passed," Mr. Trubin explained. But the expert does not believe that this can solve the problem of poverty.

"The minimum wage is calculated based on the price of a consumer basket that a healthy human being could never survive on. The last time that the price of this consumer basket was estimated was in 2012. The state first saves on wages but then loses money as a result of having to provide medical services to people that acquire illnesses through malnutrition and people with weight deficit." Mr. Trubin complains. According to him these kinds of savings held back economic growth: poor people have no motivation to increase their productivity, many prefer to get paid under the table while companies that have access to cheap labor don't have incentives to introduce new equipment or improve their technologies. In addition, the working poor also demand social support: last year 3.7 million people got regular and one-off payments from the regional budgets, in total these support payments were some RUB 29 billion. 

The problem of the working poor in the public sector was partially solved by raising the wages of some healthcare, education and science employees according to May presidential decrees. But even in these sectors there are still whole categories of employees not covered by the May decrees, Mr. Trubin says. 

For more see the Vedomosti article and the bulletin.