A new middle class has emerged in Russia

A new middle class is likely to be forming in Russia, consisting of veterans of the war in Ukraine and workers in industries whose services have seen a sharp increase in demand due to sanctions, according to an article by the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) titled “Population Welfare: Uneven Growth.”

According to analysts, these two categories of citizens are now "leading in salary". The salary of contract soldiers fighting in Ukraine, not counting one-time payments, is more than twice the average monthly salary in the country. Also, in the conditions of a shortage of personnel, the salaries of workers in those areas where "import substitution is actively taking place and production is growing rapidly" are growing rapidly. In particular, this concerns mechanical engineering, the chemical industry and IT.

There are no exact criteria for the middle class, the Center for Macroeconomic Analysis and Short-Term Forecasting notes, adding that the key criterion is the income level. For a person to be considered middle class, he or she must earn, according to some methods, one and a half times more than the minimum wage, i.e. 28,863 rubles, and according to others, one and a half to three times more than the average salary in the country. Vedomosti calculated that in this case, people earning more than 82 thousand rubles a month can be considered middle class. While an ordinary contract soldier earns no less than 200 thousand rubles a month.

In turn, Associate Professor of the Financial University Alexander Safonov believes that it is premature to classify war participants as middle class. He emphasized that the definition of this category always includes stable income and professional qualifications, and not current demand. In his opinion, the military can be considered middle class if they can "properly manage their savings and invest them in themselves and the future generation."

It is more difficult to determine the average or median salary of Russians who work in the import substitution sector or at defense industry enterprises. Deputy Minister of Industry and Trade Kirill Lysogorsky said in February that more than half a million people had transferred to work in the defense industry since the beginning of the war. The average salary in this sector, according to him, increased by 20-60%, amounting to about 90 thousand rubles.

The Russian labor market as a whole has developed an atypical situation, experts from the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) note. Poverty is decreasing rapidly, but at the same time, income inequality in society is growing. As economists say, this usually happens differently: the income gap is characterized by the simultaneous and consistent enrichment of some and the impoverishment of others. Currently in Russia, according to CMASF data, the standard of living of all socio-economic groups is growing.

Thus, the share of Russians living below the poverty line decreased to 8.5% in 2023, for example, in 2016 it was 13.5%. The share of people whose per capita income exceeds 100 thousand rubles has almost doubled. In 2021, there were 5.7% of the population, and by the end of 2023 - 10%. In addition, the incomes of the rich and the upper middle class are growing.

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