In March 2020, Vladimir Putin said that 70% of the country's population belongs to the middle class. The President argued that such an assessment is the result of research using the World Bank methodology. We checked whether such calculations actually exist.
On the 20th anniversary of the victory in the presidential elections in 2000, TASS agency recorded a series of short video interviews “20 questions for Vladimir Putin.” In the 16th episode of this project, the head of state spoke with Andrei Vandenko about the income of the population. In particular, the presenter asked Putin why a large middle class has not been formed in the country. In response, the president said: “Look, do you know what the middle class is? If you think that the middle class is the way they live in France, Germany or the United States, then this is not true. The middle class is different in every country. There is a corresponding methodology of the World Bank, it consists in the fact that the middle class is calculated by the number of households, people whose income is one and a half times more than the minimum wage. We have such... The minimum wage is 11,280, in my opinion, this year it is, and the average salary is much higher. We have quite a lot of them, confidently over 70%.” When Putin says the last phrase, an explanatory caption appears on the video: “73.1% of citizens have an income of more than 1.5 times the subsistence level.”
Putin’s counter-question, raised during the interview, “Do you know what the middle class is?” has been troubling the minds of economists, sociologists and other researchers for decades. For the first time the term middle class used back in the mid-18th century, the English writer James Bradshaw wrote in a text entitled “A Scheme for Preventing the Outflow of Irish Wool to France.” Friedrich Engels at the end of the 19th century determined the middle class as people who in late feudal society belonged neither to the nobility nor to the peasants, and then became the new ruling class, that is, the bourgeoisie. A definition that is still used in one form or another today: gave British statistician Thomas Stevenson in 1913: the middle class is people in the hierarchy between the upper and working classes, these are highly qualified specialists, managers and senior civil servants. According to Stevenson, representatives of the middle class own a significant part of human capital, but at the same time are under the control of elites, who, in turn, own financial capital. Note that in this definition, belonging to the middle class is not directly related to receiving a certain amount of income. Although similar studies appeared over the next 100 years, their authors still emphasized that belonging to the middle class is determined by various indicators, including non-economic ones.
If we focus solely on the economic side of the issue, then Putin’s statement that “the middle class is different in each country” is relatively true. The border is drawn as roughly as possible between developed and developing countries. The same World Bank in one of its reports offers This is the difference: the middle class in developing countries are those people who are not poor by the standards of their societies, but poor compared to “American standards.” The authors of a 2009 study concluded that in developing countries, a person who spends on average $2 to $13 a day in 2005 prices can be classified as middle class. That same year, the World Bank released report about the Russian economy, in which he defined the middle class as “households with a consumption level of at least 150% of the national poverty level.” The level of poverty, in turn, was determined by experts through the minimum subsistence level established by the authorities.
Apparently, Putin relied on the last of these documents when making a corresponding statement in March 2020, 11 years after the publication of the report. At the same time, the president’s interpretation differs markedly from the position of the World Bank stated then. Firstly, we are not talking about any global methodology - we were able to find a statement about 150% only in this report on Russia. Secondly - and most importantly - the Russian president argues that a person can be classified as middle class based on his income, while the World Bank defined middle class by expenses. If you follow this logic, you can calculate that a representative of the middle class in Russia does not earn, but spends a certain amount per month. Accordingly, if you follow the 2009 report to the end, it is necessary to talk not about the minimum wage, but about the living wage.
In a 2015 report, World Bank experts refused from defining the middle class through exceeding the state-established minimum subsistence level. At the same time, they explained that they consider Russians to be middle class who spend at least $10 daily, that is, at least $300 per month, about 18,500 rubles. at the average dollar to ruble exchange rate for that year. Note that we are not talking exclusively about working people. For example, if a middle class family consists of parents and two children, this means that their total expenses in 2015 amounted to 74,000 rubles. monthly (savings are not included in this amount). According to a World Bank report, there were about 60% of these in Russia at the beginning of 2015. "Kommersant" then suspected organization in manipulation - when calculating the volume of the middle class in relation to Russia, they used the same methodology as when analyzing, for example, the countries of Central Asia.
Given that the term “middle class” is not strictly defined, there are widely varying estimates of its share in the population. Moreover, most of them are one and a half, two and even three times less than those voiced by Putin, and scientists and experts in their research rely not only on the level of income, but also on other factors: level of education, non-physical work, availability of savings and real estate, self-identification, etc. People who meet all the criteria are included in the so-called core of the middle class, and those who meet only part of the criteria are in its periphery, although the methodology differs from study to study. In 2015, the Russian Academy of Sciences appreciated The share of the Russian population that belongs to the core of the middle class is 18%, and another 26% belongs to its periphery. Two years later, experts from the Center for Analysis of Income and Living Standards of the Higher School of Economics published a study according to which the “generalized middle class” is 28.4% of Russians. Another expert from the HSE, Professor Natalya Tikhonova, in 2019 appreciated the size of the middle class in Russia is 38.2% of the population.
Thus, Putin's assertion is based on a World Bank report on Russia released in 2009. This document does not propose a universal methodology for assessing the middle class, and the definition used by experts suggests conducting such an assessment not by income, but by a person’s expenses. Moreover, in its subsequent reports, the organization abandoned this approach. Many experts, including Russian ones, evaluate the middle class not only by the level of well-being, and their estimates are significantly lower than the one mentioned in the interview by the Russian President. Perhaps it was no coincidence that 70% was included in Putin’s answer - in 2008 he spoke: “I believe that the minimum level for the share of the middle class in the overall population structure by 2020 should be at least 60% for us, and maybe 70%.”
Photo: TASS
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