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Russia: Patterns Of Poverty Similar To Other Market-Oriented Countries

Washington, 19 November 1998 (RFE/RL) -- Russia's halting moves toward a market-based economic system have brought it one thing normal in market countries around the world -- patterns of poverty.

The U.S. Census Bureau's International Programs Center in Washington says a study of Russian census data gathered in 1992 and 1995 shows that as soon as the old system collapsed with the dissolution of the USSR, the circumstances and education of people began to play deciding roles in whether they were poor or not.

Overall, more than one-third of Russia's people were living below poverty levels in 1992, one year after the breakup. Consumer prices increased 26 times and earning power fell one-third in those first 12 months. By 1994, real income had fallen to 60 percent of 1991's level.

Marc Rubin, the U.S. Census analyst who conducted the study, says that in the period through 1995, the patterns of poverty in Russia conformed with those in other countries.

Rubin says the data showed a bottoming out of the crisis, with female-headed households and the elderly more at risk along with those with less education and lower employment status.

Rubin says those who were officially unemployed were four times more likely to be poor than those with jobs, that female householders were 3.7 times more likely to be poor than their male counterparts and that while the elderly were very vulnerable, households headed by someone 64 or younger were actually 3.2 times more likely to be poor.

The reason, says the study, is that "transfer income" -- disability allowances, pensions, stipends and the like -- often made the difference of whether a family fell into poverty.

These government payments were not as available to younger workers, and the data showed that 60 percent of poor householders between ages 18 and 54 received no such supplemental income.

Education also began to play a significant role in whether Russian citizens fell into poverty. Those with 12 years or less of schooling were twice as likely to be poor as those with more education. The study says this may indicate that in a more competitive society, levels of education will be an "important benchmark for economic success."

Rubin, in a telephone interview with RFE/RL, said the Russian patterns of poverty were no worse than those found in developed nations, and in fact showed that those in the highest risk groups were not that much poorer than others:

Rubin says he got a sense in studying the data that the depth of poverty was not that much worse for those at high risk than those who were in demographic groups which were less likely to be under the poverty line.

This is quite a change from the communist system under which people had a place to live and food to eat, says the study. Although standards of living were well below those in the west, particularly in housing, it says, "daily life was predictable." The kind of poverty that existed in Tsarist Russia was eliminated, it says.

But now Russians are living in different times and the transformation to a more open economic system has created, temporarily at least, a new group of people in poverty.

Rubin says the study used three different measures, aiming not to set an exact ruble amount as a poverty line, but generally finding those whose incomes fell below 50 percent of median incomes, adjusted for family size and composition. It did not include unofficial or black market income.

Rubin says there was definite improvement between 1992 and 1995, with the percentage of those living in poverty declining from 33.5 percent to 24.7 percent. And despite the current financial crisis, he says the study indicates that only those with limited education continue to face a bleak outlook.

The data does not cover the current crisis, says Rubin, but it does point up the still serious need for a stronger social safety net to help those most vulnerable:

Rubin says the social safety net is porous and does not target those in need effectively. It doesn't show specifically in the study, but the data indicates that benefits are skewed (misdirected) and that some of those at greatest risk fall through the cracks and get no help and that's no equitable.

Rubin says the U.S. Census study shows that the biggest difficulty for Russian workers is to adopt to an economy that now requires the development of individual work skills. Nevertheless, the study says, the surge of this kind of poverty is new to millions of Russians and poses an obstacle to economic growth "that may take years to overcome."