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Russia: Middle Class Takes First Steps

For Russian economy-watchers, the past year in Moscow has seen what might prove a significant new trend: A growing number of the capital's retail outlets are catering not to the super-rich but to shoppers of more modest means. Statistics on Russia's nascent middle class vary greatly and their implications are hotly debated. But as RFE/RL reports, there is no doubt the country is witnessing the birth of the middle class -- a demographic group many hope will eventually force greater change in Russia.

Moscow, 20 December 2002 (RFE/RL) -- It has the country's largest multiscreen movie theater, an ice rink with palm trees shipped from Florida, and more than 2 kilometers of storefronts. This is MegaMall, opened this month in suburban Moscow to cater to a growing appetite for consumer goods -- and proof that Russian society is slowly evolving to bridge the divide between the very rich and the very poor.

One of the shoppers browsing at MegaMall, 21-year-old Yelena, described herself as a member of Russia's new middle class and said she is pleased by the growing number of alternatives for mid-market consumers. "Everything's new, everything's interesting here [at MegaMall]. Especially since it's being so well developed. It's interesting, of course. I like it. I think it's right [for Russia to have malls]."

Against a grim nationwide backdrop of poverty, alcoholism, and lower life expectancy -- particularly in the regions -- Moscow's boom in mid-range shopping outlets is a welcome harbinger of economic and social change.

Moreover, the growing middle class also signals a possible change on the horizon for Russia's notorious top-down style of government. A strong middle class could help instigate real political change from below, stifling the corruption and elitism that have long shaped the country's political system.

Talk of a post-Soviet middle class in the Western sense first cropped up in the mid-1990s. But expectations were suddenly cut short with the August 1998 economic crisis, which wiped out bank accounts and sent the ruble plummeting.

According to a recent benchmark study, however, the numbers are finally approaching pre-crisis levels. The most recent results of a biannual poll conducted by "Ekspert" magazine and the Comcom research agency, the middle class now comprises some 24-26 percent of the total Russian population.

The survey, aimed at defining consumer trends, uses as its defining criterion a per-capita income of over $150 a month, which is three times the official subsistence level and roughly equal to the country's average monthly income -- far lower than the United States, at $2,200, or even the Czech Republic, at $410.

Although the survey technically defines as middle class anyone earning a monthly income of up to $2,000, the vast majority of the group earns significantly less -- typically no more than $300 a month. In Moscow, where salaries are significantly higher, the levels are adjusted accordingly.

"Ekspert" says the middle class is generally equally divided between men and women. Often in their 30s, most members are mid-level professionals with higher education working in the private sector. They often live in privatized apartments, own their own cars, feel that they make their own professional and social decisions, and are not afraid to take risks.

The survey and its implications are a subject of some debate. Lyudmilla Khakhurina is a pollster at the All-Russian Center for the Study of Public Opinion (VTsIOM), the country's top polling organization. While she agreed the middle class is growing, she questioned the use of income-distribution figures to measure the dynamic. She said the statistics issued by the state committee that compiles them might not accurately reflect real income.

In Russia's peculiar economy, housing was essentially distributed for free after the end of communism, and utility payments remain miniscule. But the country's social infrastructure has otherwise collapsed. A large part of the economy is also in the black- and gray-market sectors. "The criteria are changeable inasmuch as our social structure is not clear -- or rather, it's changing, it hasn't yet been fully developed," Khakhurina said.

In defining the Russian middle class, Khakhurina prefers to look at people's consumer preferences and their own evaluation of their status. She describes the middle class as a group of independent professionals who make up 15 percent to 17 percent of the population. "The middle class in Russia is not made up of small and mid-sized business owners, because there are only a few of them. Without question, those people of course think of themselves as belonging to the middle stratum. But [the middle class] is to a significant degree made up of successful specialists -- professionals who are either managers or experts hired by companies."

Khakhurina and other sociologists also speak of a "proto-middle class," which they define as occupying a niche just below the middle class itself. Khakhurina says both groups together comprise about 30 percent of the population.

Vladimir Andreenkov is director of the Institute of Comparative Social Research (CESSI), which has conducted research for Western companies seeking to define consumer demographics in Russia. He also questions "Ekspert's" definition of "middle class," saying the starting income level of $150 is too low.

Andreenkov says "middle class" in Russia does not correspond to Western definitions of socioeconomic status, which include factors other than simple purchasing power. "It's already necessary in Russia to include some additional characteristics to define the middle class -- not just that someone is earning, say, $500. Other characteristics are needed. Chiefly, what does he own? That is, his history. How long has he been earning that money? And some other additional things are needed to understand more fully whether there really is a base of significantly well-off people."

Other analysts, meanwhile, have tried to pinpoint the political leanings of the new middle class, saying it is a growing demographic that could eventually force politicians to tackle issues such as law enforcement and the corruption choking market competition.

The pro-market Union of Rightist Forces party says it lands most of the country's middle-class votes. But Khakhurina of the VTsIOM polling agency is more reserved, saying the only thing that can be said about the middle class as a political entity is that it is the least likely of any group to vote for the Communist Party.

Most parties, including liberal and pro-Kremlin groups, fully support economic reforms favoring a market economy, the one issue generally uniting the middle class. Some recent polls have also showed a significant number of young professionals favoring nationalist and even anti-Western policies.

While definitions remain under debate, few would deny Moscow's changing physical face reflects a social development. Andreenkov said the malls sprouting up around Moscow are filling a vacuum by providing a public space where people not only shop but also find entertainment. Many of the malls cater to entertaining children with playgrounds and movie theaters. "People come not only to buy things, but to experience the world around them," he said.