EDITORIAL: Putin’s Demographic Fraud

EDITORIAL

Putin’s Demographic Fraud

A recent report on Russian demographics in the Moscow Times contained two stunning facts.

First, the average annual income of a Russian citizen is $7,500.  For a full-time worker with two weeks of vacation per year, that translates into an hourly wage of $3.75 per hour.  And remember, that’s the average wage, meaning something like half the population earns less.  It’s a wage that would be flatly illegal in every American state and every country in Europe. It represents desperate poverty in any civilized country.  In Russia, it’s normal. And remember: Russians pay the same prices for things like cars, refrigerators, televisions and computers that people in the West pay, because none of those things are made in Russia.

Second, the Putin regime thinks it’s doing a great job because the birthrate is rising.

This is absolutely bogus for two separate reasons:  (a) Russia’s demographic problem isn’t the birth rate, it’s the mortality rate (Russia ranks a shocking #135 in the world, out of 194 countries, for life expectancy) and (b) Russia’s birthrate is only rising because of a freak spike in population during the 1980s under Soviet rule, not because of any of Putin’s policies.

Putin’s ploy of bribing parents to have children (he’s paying them almost two years’ average wages to have a second baby) exposes the truly desperate state of Russian demographics.  To focus on Russia’s real problem, mortality, would require raising the incomes of the vast majority of citizens, something the Putin regime cannot even dream of accomplishing.  So instead, Putin totally ignores the real problem and squanders precious resources on artifice, creating the illusion of progress, which in fact only makes things much worse.

The MT article points out that in 2006 Putin devoted his entire state-of-the-union message to birth rates.  But when has Putin ever devoted himself to mortality?

In short, Russia’s demographic crisis continues unabated, and indeed is reaching new lows, while the Kremlin does nothing but what it has always done: lie, cover up, and suppress the truth.

 

39 responses to “EDITORIAL: Putin’s Demographic Fraud

  1. he average wage, meaning something like half the population earns less

    no
    you talking median, which is exactly half more + half less

    LA RUSSOPHOBE RESPONDS:

    If we meant that, we would have said “exactly” instead of “something like.”

    You’re quite right that it would be interesting to know the median figure. Can you supply it?

  2. the hourly wage will probably be a bit more than $3.75 because Russians are guaranteed four weeks paid vacation per year. But otherwise the article is spot on.

    • be a bit more than $3.75
      or a bit less, which is more likely, since in this average there is a relatively small group with extremely high incomes

      • “demographer”, let me say your last post is quite factually incorrect – to a sociologist’s view. You seem to not know the GINI index for Russia – otherwise you wouldn’t be talking about “small group with extremely high incomes” in our country.

        And then, you all seem to mistake “reported” wages for “paid” wages.

        E.g., in Georgia, “reported” is 25% of the “real” economy. The country is #1 in the world by the share of black market in the GDP.

        I believe, in Russia “grey” wages are about 30-40% of “total” wages. “Reported”, and the one you count here, is, thus, 60-70% of “real” “average” wages. Thing one should consider when talking about such matters.

      • factually incorrect – to a sociologist’s view
        very likely
        actually, I do not know – what is a fact in sociology

        one sociological fact from FOM: http://www.newsru.com/finance/29oct2010/sberezhenia.html
        income of 1/2 of Russians (it is median) in last 3-4 months does not exceed R10000 a month, i.e., $333.33 a moth, $16.66 a day or $2.08 an hour

        is it a fact? or what?

        • Let me explain what is a fact in sociology.

          It is a fact that “salary” does not equal the “income” you quote.

          It is a fact that with Russian pensions of 10 000 and share of pensioneers and children in population, this 10 000 number says absolutely nothing about the salary, actually.

          It is a fact one must think before making macroeconomic conclusions.

          • let you try to read the very first line of the topic start

            guess, there are lot of places to talk sociology

            • Let’s reread it together.

              “First, the average annual income of a Russian citizen is $7,500. For a full-time worker with two weeks of vacation per year, that translates into an hourly wage of $3.75 per hour. And remember, that’s the average wage[…]”

              7500/52 weeks/5 days/ 8hours = 3.6 per hour. Minus holidays, etc, approximately 3.75.

              Now the querstion is: do you understand at this stage, without further explanations, why and where did the team fckd up?

    • There has recently been a heated argument on this blog just on this point. It seems that Dimitry was making a point that everything is cheaper in Russia, and so real wage was more like $10 per hour, if calculated using the “PPP” method or something called “Big Mac” index. I am very skeptical.

      However, this article clearly says that prices of many items (cars, appliances, etc.) in Russia are the same as in the West.

      Where is the truth here?

      • The truth is cars are the same, and bread is cheaper.

        The World Bank thinks paying in RUR, you get 1,8 times more goods, than paying in USD.

        And there are many other flaws in the way they count wages in the article. Glad you remember the previous discussion.

      • actual the vast majority of cars are more expensive in Russia, the same goes for electrical appliances.
        Re: real wages; I don’t know if the official stats take into account the fact that a pretty large proportion of privately owned companies in Russia still continue to pay the bulk of their employees’ compensations unofficially to cut down on the amount of social tax they have to pay. By law in Russia on each salary that is paid the employer also has to pay another 28% of the gross paid to the employee in social taxes, many employers minimise that amount by reporting an official salary that is barely above the guaranteed minimum wage and paying everything else in cash directly to the employees. So often times you got people whose official slips show a pay of maybe 5 thousand roubles but who actually get paid 15 or 20 thousand per month. So I don’t know if they somehow figure these data into the official stats. My guess would be that they don’t because there’s no way you can collect data on actual wages through the official channels, people will just stonewall you.

  3. cars are more expensive in Russia

    • It depends. Russian built Ladas sell for under $10,000. Russian built Ford Focus costs between 12,000 and 20,000 depending on the options. This is no more expensive than the US price of Focus. In fact, $12,000 is a lot less than the price of base Focus sold in the US. The Russian built Chrysler Serbing and sold as Volga Siber, sells for about $14,000. That’s a midsized car.

  4. Steamed McQueen

    It’s not only cars that are more expensive. Clothing, building materials and electronics cost more as well. Owing to Russia’s protectionist trade policies pretty much anything that is imported has a high import tariff. This increased tariff is passed on to the end consumer.

    Sure, you could buy the Russian- made equivalent of all these things and more, but you will end up with a substandard item.

    Except vodka. That they do really well.

    • You get a Russian-made Ford Focus without any import duties paid – and what? Is it “substandard” compared to the US-made FF? Come on…

      VW, Ford, PSA, Renault-Nissan, and most others all produce their best models in Russia. Import duties barely play any role with the cars for the middle class.

      You are really mistaken here, SMQ, as the policy of Russian government with this has been a success – middle class cars are produced in Russia en masser, giving jobs to Russians, and duties from those imported higher class cars are spent to support Russian car manufacturers.

      The problem is that Russian car producers still develop too slowly…

  5. Is the 3.75 dollar per hour a figure computed simply at the exchange rate or computed with purchasing power parity adjustment in mind? At the exchange rate, the number $3.75 is not very meaningful because a dollar can buy a lot more goods in an average Russian city than in the United States. Moreover, comparing the “hourly wages” estimate (median or average) is somewhat non-standard practice. When comparing the incomes across the countries the economists prefer to compare the GDP per capita, adjusted for purchasing power parity. There is plenty of quite respectful organizations collecting this data. FYI, according to CIA World Factbook, Russia’s GDP per capita, adjusted for PPP was $15,100 (ranked 73). For comparison, it was $6,600 for China (ranked 160), and $46,000 for the United States (ranked 11). Roughly speaking, this means that an average Russian can afford one third of what an average American can afford.

    • Fine, but why all this PPP adjustment, if people here say that lots of stuff cost at least the same as in the West

      • RV, because with the PPP at 1,8, you get twice more paying in Ruble.

      • I compared lately the number of cars per capita bought by Russians and French, and it seemed Russians bought 3 times less cars, spending 3 times less money in the same period.

        Exactly this 1/3 Jacob tells us about.

  6. PS: these were 2009 GDP figures, the most recent CIA has.

  7. In order for PPP comparison to be relevant the “average” consumer’s basket of consumer goods in the U.S. and and in Russia needs to consist of the same set of items OF EQUAL QUALITY PLUS each item of the basket needs to correspond to the same proportional share of the “average” consumer’s overall consumption in both countries. However, the consumption goods (food, clothes etc.) made in Russia are CHEAPER but sell only in Russia. That is, they do not hold the same standard of quality than, say, food, clothes etc. made in Europe, North America, Japan, China etc. (otherwise the Russian made consumer goods would capture markets in all these diffrent parts of the world).

    That means the “average” Russian’s basket of consumer goods being the only basket containing EVEN items made in Russia (which are not able not to sell anywhere else but in Russia even though being cheaper) means that PPP comparison does not make sense.

    • Any comparison is impossible under these condition, e.g., an American must consume as much vodka as a Russian ;)

      • Ok, you’re fine in your fantasy world, and no arguments needed in your case.

        • Unfortunately, only under these very conditions I list above the “real world” corresponds to the “fantasy world” of any PPP comparison you so much like. And World Bank, OECD, CIA fact books or any other instance publishing PPP-based figures state it always very clearly…

          • Dixi, the above comment was a responce to “demographer”‘s.

            As to the PPP and all the premises behind the concept, please go to wiki.

            It’s really just too much to write to explain. If you don’t want to read WP, just beleive what the World Bank says, they are better in economics than we two.

  8. Ohhhh yes…
    Vodka is just over $2 per bottle here in moscovia.
    Keeps the peeps conveniently subverted!

    However the biggest problem is Orthodoxy…

    • The Russian state Church is Orthodox in name only.

      Rather than being a road to spiritual enlightenment as are the Antiochean, Romanian, Greek, and Georgian Orthodox Churches, the Russian “Church” is a vile state controlled entity used for social control.

      The Russian church is a commercial enterprise too, with its own brand of cigarettes and vodka.

      • Here is a photo of the moscow KGB “church” bathroom air freshener:

        http://biletskyi.blogspot.com/2010/08/blog-post_1508.html

        Any photos or adds of the moscow KGB “church” cigarettes and vodka?

      • Not being a Christian, I am not in a position to know much about church practices, and I know even less about the Orthodox. But having been exposed mostly to mainstream Protestants and Catholics all my life, I know that every minister or priest will without hesitation condemn tobacco, booze and drugs as serious sins. I am not naive and know that despite all their differences, they are all interested in seeing their collection plates full. Still, it’s inconceivable to me that Baptist or Episcopalian clergy would endorse any of these products.

  9. I found an interesting comment :)

    Has anyone noticed the clear resemblance of the character Gollum in ‘Lord of the Rings’ and the character called Putin? Putin and Gollum might easily be twins separated at birth. Both are treacherous conniving and slimy. But the facial resemblance….oh my….a perfect match. Try as Putin might…can’t fool me….no matter how much cosmetic surgery he has!! LOL

    Read more:

    http://www.kyivpost.com/news/nation/detail/87935/#ixzz13nnWYkiU

  10. Snake Oil Baron

    The high average age for women (41.7) is important for understanding the future of Russian demographics. Even though the mean female age would be better (I don’t have that) the age structure stats do not seem to my layman’s eye to indicate that there are a significant number of very old women pulling the mean forward and eclipsing a vast number of young women. In short, the average age of Russian women is probably not too far from the mean (the half above, half below mark as stated in the comments above).

    This means that a large portion of women have reached either the point where they will not be able to have more kids or the point where they have likely decided not to have any in the future since the risks of certain birth complications begins to increase before the end of a woman’s fertile years. So even a rise in total fertility rate well above the “improved” 1.4 children per woman to significantly above replacement rate of 2.1 (probably higher in Russia depending certain factors) would not stabilize the population level for some time.

    Even if it was decided to try to maintain the population with high immigration and even if the population accepted this and Russia was a far promising destination replacing a declining population with immigrants is not as easy as xenophobes imagine. High immigrant fertility levels fall towards the local levels and poor economic performance slows the flow greatly. If there are more attractive destinations in the region and the fertility rates in sending countries are falling breaking even demographically through immigration is just not an option.

    Their best case scenario for demographics is bleak enough but there seems to be little reason to expect the best case conditions. I would be very surprised if huge numbers of young Russian women decided to have families of three or four kids.

    • Nice post. But what are the more attractive destinations in the region? And what could be the reasons for falling fertility of Tajiks and Azeris? They live in a very traditionalist s0cieties, with non-working illiterate women…

      And is Russia so different from, say, Germany, in terms of demographics? From UK? Women are working everywhere, and they have less children, quite naturally.

      I would also be surprised if Russian would switch back to 3-4 kids families, but has any Western nation switched so far?

      Immigration is the future of the West, sad but true. And Mohammed is the most popular newborns’ name in the UK…

  11. Analysts are mixed over prospects for long-term Russian growth, which primarily depends on commodity exports.

    He added that blossoming corruption among officials would put a drain on the Kremlin’s shrinking resources, leading to rising prices for the population of whom 20 million live in poverty on incomes of less than 5,500 roubles ($180) a month.

    Read more:

    http://www.kyivpost.com/news/russia/detail/88406/#ixzz143941uEs

    • So far, Russian economy is doing much better than the Ukrainian did under nationalist government of Julia Timoshenko… “Much” means two-three-fold here…

      So far Russian demography is several times better than the Ukrainian one…

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