Declining Incomes among Russians Put Future of Country’s Middle Class at Risk, Chepurenko Says

Cash, Calculator, Pen

(Paul Goble – Window on Eurasia – Staunton, February 27, 2019 – windowoneurasia2.blogspot.com/2019/02/declining-incomes-among-russians-put.html)

The declining incomes of Russians over the last few years are not only leaving all but the very wealthiest residents of that country poorer than they were but putting at risk the formation and survival of the politically critical middle class in the country, according to Aleksandr Chepurenko of Moscow’s Higher School of Economics.

The sociologist says “the societal function of the middle class is to support social stability: the middle class fears losing that which it has earned by work and therefore it is responsible in its political behavior” (znak.com/2019-02-27/v_rossii_ischezaet_sredniy_klass_byudzhetniki_intelligenciya_zagadochnaya_russkaya_dusha).

Such a class began to appear in Russia in the 1990s when the state was weak,” and consequently “we can speak about the middle class in Russia as being in its first generation,” a collection of people who having lost everything at the end of the 1980s and early 1990s nonetheless were able by their own efforts to claw their way back to relative well-being.

The emergence of such people gave hope for the future, but in the last two decades with the creation of the power vertical, they have been eclipsed by “a quasi-middle class,” people with roughly the same incomes but whose money comes not from their own efforts but as a result of rents offered by the state in exchange for loyalty, Chepurenko continues.

“These people did not risk anything: they simply accepted decisions” from above and therefore played and play a very different social-political role. Among the most prominent of these are the siloviki, “‘the holy cow’ for our powers that be.” As long as the pie was growing, all of them could continue to get more without difficulty.

But when the pie ceased to grow but in fact became smaller, a problem arose and is only intensifying, forcing them not to fight for the creation of new wealth but for the division of existing wealth among them. As a result, the sociologist says, there have now emerged “a large number of conflicts of some siloviki structures with others.”

Big businessmen, who are not part of the middle class either, “are interested in stability but not in a free, competitive market system characteristic of a democratic society.” They thus are not like the middle classes in the US and other Western countries in either their behavior or their role.

The real middle classes, whenever it is possible, “vote in favor of the market and a competitive economy.” In Russia, they are deprived of the possibility of voting in that way because of the destruction of parties who favor such outcomes. And that has led to some dangerous trends, including withdrawal from normal political life.

All of this is hidden by the fact that Russians tend to evaluate middle class only by income which means that many government or quasi-government employees are included in it even though they have different values and different behaviors, Chepurenko says. Many in fact hold values directly antithetical to the genuine middle class.

The situation is not good for either the real middle class or these people, but the reasons are different: Earnings from entrepreneurship are down by half over the last decade or so, but possibilities for the lower levels of the bureaucracy are down as well.

The differences between these two and even the decline of both have been hidden not only by the propensity of Russian scholars to measure the middle class solely by income but also by the explosion of consumer credit as people in both categories try to maintain their lifestyles by borrowing. That isn’t sustainable for very much longer, he suggests.

To change this situation, Chepurenko continues, the government would have to do what it did in the early 1990s, reducing its role in the economy, eliminating many “‘economic crimes,'” reducing pressure on businesses and so on. But it is far from clear that it will take these steps, although some economic developments already on view in the West may appear.

Thee include the rise of what some call “the precariate,” the group of people at the bottom of the middle class who work as adjuncts in universities or hold multiple jobs in order to try to maintain a middle-class way of life. There is some evidence that Russia is going in this direction as well.

“But we could go in a different direction than the West and continue to surprise the entire world by our weapons, our ballet and our sports, and then, in the absence of necessary economic, political, and social conditions, our middle class will not disappear because it simply has not appeared.” Today, that seems the more likely prospect.