After the collapse of the Soviet Union in December 1991, the economic situation in Russia sharply declined. Inflation galloped, wages dropped, and large numbers of people lived below the poverty line.
In the beginning of the 1990s, the average salaries in Russia were lower than 100 US Dollars. In 1992 the average monthly wage in the country was only US $23. The income level began to grow only in 2000s. Russians enjoyed relatively high income in 2012-2013.
However, in 2014 inflation rates began to outpace the income growth.
Average salaries in Russia 1991-2000
The period between 1991-2000 was one of the hardest in the Russian history.
During 1992-1996, the average rate of real wages decreased by 52% as compared to the previous years. Russians still remember those years as awful times full of crime.
High unemployment rates and non-payment of salaries were common in all the cities of the country.
1998 Ruble crisis provoked by a drop in oil prices and Asian financial crisis resulted in ruble crash and national bankruptcy.
Average wages in 2000-2014
The 2000s were marked by a rapid and ongoing growth of the population’s nominal income. The share of people living below the poverty line dropped from 29% in 2000 to 13% in 2009.
- In 2012, the salaries increased by 10 times as compared to 2000. It had a positive impact on the quality of life in the country. Russians started to travel more and were able to save money.
- In 2013, the average salary of Russians increased by 12% and reached 29,792 rubles (almost $1,000).
2014 crisis and what happened next
The current economic crisis in Russia started in the mid-2014 due to the drop in oil prices and annexation of Crimea followed by western sanctions. The value of ruble collapsed and international investors lost their trust in the Russian currency.
Russia’s reserves helped the country to avoid a default by slowing ruble’s decline. The country’s economy is too dependent on the export of raw materials. It gave lots of benefits in the past but at the same time it is Russia’s weak point as it turned out.
Certainly, the crisis and the weak ruble negatively impacted people’s real income, which started to go down in 2014. In rubles the wages continued to grow, while their actual value (if exchanged to US dollars) dropped significantly.
- Thus, in 2014 Russians saw their wages to shrink by 10% as compared to 2013. The average monthly remuneration in 2013 was $847 (32,495 rubles).
- In 2015 Russians earned only $558 (34,030 rubles) on average or 34% less than in the previous year.
Apart from this, inflation rates were extremely high, which reduced people’s purchasing capacity by 25-35%. On average, half of the income was spent on food.
In 2016 the inflation rates slowed down. The average monthly salary for the first half of this year equaled to around 35,000 rubles (nearly $580). In June 2016, average wages even reached 38,447 rubles (around $600).
Still, the situation is much worse than it was in 2013. Prices are higher while the real salaries are lower.
It is predicted that only in 2017 the Russian economy will start improving.