Grigoriev: Developed countries face a global crisis of relative inequality

22 april 2019 | RBC-TV

"We are dealing with a threat to a number of developed countries—when the rich are getting richer, and the mass middle class have not experienced real improvement in its position for the past 10 years. This is not absolute poverty, but a global crisis of relative inequality," said Leonid Grigoriev, Chief Advisor to the Head of the Analytical Center, live on RBC TV.

Leonid Grigoryev
Leonid Grigoryev
Chief Adviser to Head of the Analytical Center

He states that about 10% of the population in the OECD countries are the wealthiest people. They are the main consumers of expensive goods and luxury items. "The representatives of the lower middle class who work in the hospitality industry and the service sector provide services to them. They are educated, wealthy people who know their rights and use them, but see how social stratification is exacerbated. The agony of political systems, the yellow vests movement, and Brexit demonstrate a very serious gap between them," explained the expert.

According to RBC TV channel, the middle class in Russia feels insecure as well. The media quotes the results of the Ivanov Consumer Index poll conducted quarterly by Sberbank. According to the study, the share of Russians who evaluate their incomes below the average has increased from 35% to 48% since 2014. The authors use conditional "Ivanov" as a typical representative of the middle class: he has savings, can afford traveling and going to restaurants. If a person has enough money only for basic needs, the income is ranked as below average. At the same time, the middle class is the most mobile category of the population, its representatives are more likely to make a career and get rich. Therefore, the middle class is very important for the country.

However, according to Mr. Grigoriev, the results of the presented research should be treated skeptically. "In Russia, the inequality had been formed by 2000 and has not changed since then: 10% of the wealthy Russians receive about 45% of all incomes, while 20% of the poor receive 6-7%," he said. The rest belongs to the middle class. In general, Russia belongs to the category of moderately developed countries with a high inequality level. A similar situation is now emerging in Argentina and Brazil, added the expert. However, Latin American countries experience stagnation, while the Asian world faces economic miracle. "When discussing the problems of wealth and poverty, we need to talk about how to accelerate the economy," said the expert. "The development program must be flexible and adjusted according to rapidly changing conditions."

Later on the same day, in a live television broadcast on OTR channel, Mr. Grigoriev explained that the middle class was a broad concept and the standard of living in this category might differ significantly. In general, the middle class is represented by educated people who work honestly and have financial stability. However, if the upper layer would feel confident even in crisis conditions, the lower layer is represented by small employees without savings, who constitute the core of the yellow vests movement.