Wages in Russia increased considerably in recent times, according to the government’s statistics body Rosstat, although locals complain they can purchase fewer things than before due to raising prices of goods, services, and cost of living. Electricity, water, council fees, and transport, all these monthly and daily expenses went up.
In fact, Russians on average pay checks are 40% worse off in 2018 as compared to 2013 because of the galloping inflation, although officially salaries climbed by over 15 thousand rubles per month — from 27 to 44 thousand RUB. Let’s see what is going on with Russian salaries in recent years, pre- and post-Crimea takeover.
Russian wages in 2018
The recent update on wages in Russia, as per official statistics, states that in July 2018 the average monthly salary was 42,413 Rubles, which is around USD 670.
This is huge difference to our 2016 report when the average monthly wage was around USD 437.
In just 2.5 years Russian salaries had increased by nearly 50%.
In a substantial extent it’s due to the drop in exchange rates between the US dollar and Russian ruble, although the nominal values climbed as well.
The calculation of average wages includes bonuses and overtime, as well as any material benefits such as the cost of accommodation or food that is provided to workers, which are added on.
Wages in capitals vs. regions
Salaries in cities such as Moscow and St. Petersburg are much higher than in remote regions or even within the capital regions themselves.
- In July 2018, residents of Moscow earned on average 81,000 rubles per month ($1,285), while in the whole region — only 49,000 ($778).
- Residents of St. Petersburg earned 60 thousand ($950), while in the region it’s only 43 thousand ($680).
- The lowest wages by federal region are in Northern Caucasus: 26,500 ($420).
- Newly adopted Republic of Crimea has wages of 28,000 rubles per month ($444). It’s still higher than in its former homeland Ukraine, where wages are reaching only US$320 per month country-wide.
Changes in the size of salaries in Russia 2013-2018
The following table shows how salaries in Russia changed from 2013 to 2018.
In January 2013 the size of an average pay check in Russia was close to 27 thousand rubles. It seems low, but it was about US $900 at the time.
If we look at the purchasing power of money at the time, an average Russian was able to buy 40% more goods and services in 2013 than he or she can acquire in 2018.
In January 2015, after the successful acquisition of Crimea by Russia in early 2014, average Russian salaries were on the level of 31 thousand. At the end of January 2015 the exchange rate jumped to 67 rubles for 1 US dollar (same as now), although it wasn’t the highest climb for the Russian national currency in recent years. Electronics was sold out as locals tried to offload quickly losing value rubles. It was the time of mad panic in Russia. So, the average salary of 31 thousand was worth only $462.
Will 2018 USD to RUB exchange rates exceed the peak of 2016?
The peak of conversion rates was at 78 rubles for 1 US dollar in January 2016. Banks were selling dollars at nearly 100 rubles for 1 USD at the time.
Some experts predict a similar event by the end of 2018, which doesn’t look likely, since the prices of oil went up. Selling oil and natural gas is the predominant income source for Russia.
Russian salaries in January 2016 were on the level of less than 33 thousand RUB (USD 437 at the time), with strong daily fluctuations of the exchange rate.
In January 2017 Russian wages achieved the level of 39 thousand RUB, while the exchange rate stabilized at around 60 RUB for 1 USD. 39 thousand rubles was around US $650 at the time — roughly the same amount as in July 2018.
The exchange stabilized for the next year and even dropped to 56-57 RUB per 1 USD.
On 5 September 2018 the exchange levels jumped to 68 RUB for 1 USD, or nearly 20% up on the last year’s values. Such fluctuations affect the size of salaries in US Dollars, which we provide for comparison. But changes in exchange rates also affect the purchasing power of the Russian national currency, as it’s highly dependent on import of goods.
The purchasing power of the Russian currency never returned to the levels of 2013, even when the exchange dropped to 56 rubles for 1 US dollar in 2017. Unfortunately, once the prices are up, they aren’t going down in Russia.
So, even though the Russian salaries are up, they are far behind in the purchasing power of 2013 situation when an average wage was around US $900.
But it’s better than it was 2 years ago, when the value dropped below $450.
Such huge fluctuations in the levels of earnings and income, which appear largely unpredictable, are definitely not making locals feel secure. This is one of the reasons why more Russian women seek partners abroad today than 5 years ago. Women naturally have the need to feel secure and the current situation in Russia makes them less confident about the prospects of starting a family in their homeland.