Monetary inequality in Russia in the sociological dimension

Abstract

This article examines the specifics of the income inequality structure in modern Russian society, as well as the tendencies for its change during the country’s post-Soviet period of development. It is shown that, compared to other countries, the traditional economic indexes which measure income inequality (decile ratio, Gini coefficient) position the Russian Federation as a country with a high degree of inequality within the mass layers of the population, especially when compared to Europe, albeit the level of inequality is slightly lower compared to BRICS member states. When using equivalence scales, which adjust the people’s income after factoring in economies of scale in consumption, Russia’s inequality figures improve even more. Based on quintile income distribution and the concentration of income within the highest quintile, Russia also occupies an intermediate position, surpassing most European countries, though not BRICS member states. However, the highest quintile is characterized by a high degree of differentiation. When transitioning from the wealthiest 20% of the population to the 1–5%, Russia’s place among other countries of the world changes significantly: when it comes to the gap between the “upper crust” and the masses, Russia can be considered one of the leading countries in the world. It has also been revealed that on the other end of the income distribution spectrum, at the population’s lower strata, there has been a noticeable “rise” of low-income groups in the last few years, with them somewhat approaching the middle. It was manifested in a more rapid increase in prosperity among the lower 40% of the population when compared to the population in general, as well as in a noticeable decrease in poverty levels during the 2000’s. Those citizens who were left in the lower strata of income distribution created a clearer image of poverty, which differs from the “average Russian” and emphasizes the importance of gauging not only low income level, but also an array of non-monetary inequality dimensions. Such a process of “homogenization” has lead to an increase in the size of groups with median and average income, with them being the most numerous groups in the current structure of Russian society. However, the increase in the number of people in said groups was not only caused by their shifts from low-income groups of the population, but also because of some members from the more prosperous strata experiencing an “averaging” of their level of income as well.