20 Years of Capitalist Transformations in Russia: Effects on Living Standards

Abstract

Vyacheslav Bobkov — CEO, Russian Research Centre for Living Standards. Address: 29, 4th Parkovaya St., Moscow, 105043, Russian Federation. E-mail: bobkovvn@mail.ru

This article deals with social consequences of the USSR’s collapse and 20 years of capitalist transformations. As a result of employment instabilities and various pay cuts by the employers, the share of workers living below the minimum living standard in Russia has increased from 3.1% to 12.5%, i.e. almost four-fold. The overall wage inequality has also increased: the corresponding decile coefficient rose from 7.8 in 1990 to 14.7 in 2008.

The structuring of society with respect to material well-being has also cardinally changed. Those in need accounted for 21.2% in 2010, which is 20 times the number of 1990. The inequality calculated according to the share of incomes used in current consumption (also decile coefficient) has risen from 5.0 to 13.9. And there has been almost no change with respect to the share of people who live below the level of sufficiency and who constitute the dominant part of the population according to their incomes and housing conditions: from 71.0% in 1994 to 69.8% in 2010. The scales of social stress, morbidity and mortality of the population have increased multifold against dropping birth rates. In 18 years (1992-2010), the difference between the born and the dead in Russia reached a total of 13.1 million people. And, apparently, Russia is extremely underpopulated with its current 143 million people.

The social sector of Russia’s scientific corps has weakened against its constantly aging cadres. The absence of real demand for highly skilled professionals in modern Russia has lead to the worsening of educational standards in universities and the generally low innovation capacities of Russia’s economy. At the same time, the larger part of its population is excluded from access to higher professional education for material reasons. This is especially typical for youth from incomplete or large families. All of this means that the current education system in Russia is one of the key reasons for the growing inequality in society.

The people’s attitude and reactions to the capitalist reforms in Russia are as follows: only 3% accept them as highly positive; 8% consider them generally positive; 15% consider them rather contradictory and problematic; 34% are mostly critical about the reform; and 28% think of them as completely destructive to society.