Then and now: Purchasing power



While some yearn for a return to the times of cheap foodstuffs and fixed wages, a new study shows Russians are much better off materially now than 20 years ago.

In the months after the fall of the Soviet Union, western goods long banned by the Communist Party began to flood into the country. Street vendors stocked their kiosks with soft toilet paper, Levi’s jeans, good shoes and foreign-made cigarettes. But what is the point of quality products if you can’t afford them? The irony of the free market is that most things are actually expensive.

“Many people yearn for a bygone era, the symbols of which were vodka for 3.62 rubles, sausage for 2.20 rubles and bread for 13 kopecks. Today, you cannot get anything for a ruble. But has our existence worsened because of this?” asked Margarita Vodyanova in a piece in the newspaper Obshchaya Gazeta.

The minimum salary for a Russian just after the fall of the Soviet Union in 1991 was 548 rubles a month — 72 U.S. cents, at real rates of exchange — according to Yevgeny Gavrilenkov, chief economist at Troika Dialog. But this was still enough to have a decent life, as the state provided housing, education, utlities, health and child care, vacations and retirement homes. None of this was of particularly good quality, but it was universally available, and it was all free.

Money went a long way in 1991 Russia. The basic minimum salary could buy 74 loaves of bread or a choice of: 6.2 kg of meat; 6.5 kg of sausage; 13.5 liters of vegetable oil; 163 liters of milk; 6 kg of cheese; 160 eggs; 28 kg of sugar; or 3.5 liters of vodka.

A recent survey conducted by the Higher School of Economics and the magazine Ekspert on changes in Russian living standards between 1990 and 2009 found that per capita income has increased by 45 percent, while the volume of consumption per capita has more than doubled according to G.D.P.-based consumption figures.

If you measure quality of life in terms of possessions, Russians are living much better now than they were 20 years ago. In 2008, a consumer could buy 70 percent more durable goods, 25 percent more food, and two to three times more cigarettes, vodka, cars and clothing than he could during the Soviet era.

At the same time, however, household spending on childcare and education has increased substantially, along with spending on health care. The survey notes that the World Health Organization (W.H.O.) found that Russian spending on private health care is now 40 percent of total health care spending — a level well above the E.U. average.

The average amount of living space for Russians has risen about 40 percent over the past two decades, to a current level of about 237 square feet per capita, although this is still behind a country such as Finland, where the number in 2009 was 420 square feet per capita.

A 45 percent increase in income is actually not very much over 20 years, especially considering that incomes plummeted for most of the 1990s and only began to rise after the 1998 financial crisis. And although most Russians enjoy higher incomes now than they did 20 years ago, a recent survey showed that one in five Russians today lives below the poverty line and is worse off than he was under the Communists.

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