The birth of Russia out of the rubble of the old Soviet Union has witnessed tremendous changes in the economic lives of its people. Nikolai Niktin, an 82 year-old pensioner has a $170 a month pension nd his nephew earns $635 a month which forces them to scramble to survive in a modern state in which there are millionaires and poor people. Nikolai has a small house in Barvikha, a dacha community in which some will purchase $320,000 cars and live a luxurious life of conspicuous consumption. Nikolai can observe his neighbors, but “they do not speak to us, they do not greet us.” He is simply one of those millions of poor people who do the dirty work and go unobserved by those with wealth. It could almost be a scene in some 19th century Dickens novel about the two worlds of Victorian splendor and the misery of the masses.
According to Fortune magazine, the top 100 Russian wealthy people have a combined fortune of $522 billion which represents one-third of the Russian economy. The nation’s average income stands at $686. A difficulty in determining wealth in Russia is the factor that many people are paid under the table to avoid taxes. Some figures suggest the richest 10% of people earned 31% of the overall income reported in Russia while the top 20% earned 47.8% of income. Most of Russia’s wealth is most probably located in Moscow and income levels in rural areas is a fraction of that found in Moscow.
Russian sociologists indicate about 22% of the population could fall into the middle class if income alone was considered, but if education and self awareness of who is in the middle class was factored into the equation only about 7% would be classified as middle class.
The tight fisted Putin regime has allowed those with wealth to flourish, and, of course, the wealthy know it is best to stay out of politics if they wish to remain wealthy. A major problem in Russia is the flat tax system which means a millionaire pays at the same rate as someone who is in poverty.
The real question is whether the Russian people will continue putting up with a society in which most live in poverty or close to it while a minority has access to unlimited wealth.