FBK’s Economic Club Experts Discuss Real Disposable Income of Russian citizens

Why do the economy and the oil prices grow but real disposable income does not? Why does this situation remain the same even after the adoption of the new real disposable income calculation method? Where to look for growth areas? These were some of the questions discussed by well-known economists at the meeting of FBK’s Economic Club.

Igor Nikolaev, Director of FBK Strategic Analysis Institute, presented an analysis of household income over time and made a conclusion about its decline during the period from 2014 to 2017.   The decline was halted only the previous year, which is explained by the pre-election pay rise for state employees, but continued in the first quarter of the current year.

“But the main question is why last year's increase in the federal budget revenue by 17% and profit in the corporate sector by 6.3% led to an increase in real disposable income only by 0.2%,” Igor Nikolaev inquired.

Tatiana Maleva, Director of the Russian Presidential Academy of National Economy and Public Administration, said that the information about real disposable income is not sufficient to measure the well-being of citizens.

“The entire world makes a comprehensive assessment of well-being. The statistical income growth is good, of course, but people’s feelings may be different,” Tatiana Maleva said.

Evgeniy Gontmaher, Member of the Board of the Institute of Contemporary Development, agreed with this opinion and said that statistical data about income bear no relation to reality. It is impossible to persuade people who feel the opposite.

“On the other hand, there is a big part of the population in our country whose well-being can be measured rather objectively using these figures. These are, of course, different groups of state employees, senior citizens who continue to work etc.” he said.

Vladimir Gimpelson, Director of the Centre for Labour Market Studies of the Higher School of Economics, agreed with his colleagues and added that mechanisms used to calculate both real disposable income and average pay raise a lot of questions. 

“In general, the rule is simple, if there is no economic growth, there are no grounds for an increase in household income,” he said.

FBK’s Economic Club is a unique discussion platform where journalists can meet well-known economists, politicians and public officials in order to discuss a wide variety of economic issues. Analytical reports prepared by FBK are also presented in the Club.