Is Russia's Middle Class Shrinking?

Sergei Vedyashkin / Moskva News Agency

Moscow Times: Who Is Mr. Ivanov: Why Russia’s Middle Class Is Shrinking

The struggling middle class has become critically dependent on the government.

In the five years since 2014, the share of those in Russia who consider themselves middle class has shrunk from 60 percent to 47 percent. This is according to a study commissioned by the investment arm of Sberbank, Russia’s largest bank, on the “Ivanov index,” a measure of consumer confidence. “Ivanov,” a common Russian last name, is used to represent a typical middle-class person in Russia.

People who have savings, travel abroad, and frequent restaurants usually think of themselves as middle class, Yaroslav Lissovolik, head of the analytics department at Sberbank CIB, told the newspaper Vedomosti. Those who can only afford basic and immediate necessities place themselves below the imaginary boundary between economic classes; their share grew from 35 percent five years ago to 48 percent today. The fastest the self-identified middle class shrank was between 2015 and 2017, Lissovolik said.

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WNU Editor: This is a tough one for me. In Russia I consider myself upper-class, even during Soviet times. But if I was to take what my personal economic status in the 1980s and transport it to the present, I would be viewed as destitute. That is how much Russia has changed in 30 years, and why it is difficult to use metrics such as consumer confidence and personal opinion. From my vantage point the Russian middle class is growing and enjoying a life that has never been experienced in Russia throughout its history. But for those who are in the 20 - 40 age bracket, they see themselves as a class that is declining, and not meeting their expectations. They are frustrated, and they want more. This is what the next leader of Russia is going to face, and it is going to be hard to meet their expectations.

I see this same trend line in China. When I was working in China in the 1980s the political and economic leadership lived in simple homes, were driven around in Toyota vans, and their offices were as austere as you can imagine. And as for the average Chinese citizen, simplicity and sparse are the words that come to mind. Today .... Oh my God .... the leadership live in a manner that past Chinese emperors would be jealous of, and for the 400,000,000 who make up the Middle Class in China (and growing), they are living in a manner that the leadership could only dream about 30 years ago. But the Chinese Middle Class are not happy, which I will explain in a later post.