Not in favor of the poor: Rosstat’s poverty figures vs. objective reality

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In the text, monetary figures are listed only in rubles. The current RUB/USD exchange rate is 101.29 rubles/dollar, meaning that approximate conversions can be made by dividing ruble figures by 100. For example, 43,000 rubles = $424 — approximately $430.

Public perceptions of poverty in Russia starkly contrast with official statistics. Russians consider a monthly income below 43,000 rubles to signify poverty. To feel financially secure, the average person believes they would need about 250,000 rubles per month. However, such income levels are out of reach for nearly everyone. As of mid-2024, the top 10% of earners had an average income of 175,600 rubles per month. Meanwhile, the national average per capita income was just 58,191 rubles in the second quarter of 2024 — far below what most consider sufficient for a decent life.

The government, however, sets the poverty line much lower, counting only those earning less than 14,300 rubles per month are registered as “poor” in the state’s poverty statistics. By the end of 2023, Rosstat reported 12.4 million people living in poverty (a record low 8.5%). This figure rose to 13.3 million by mid-2024. Yet just two years earlier, in 2021, the agency reported 17.8 million poor people. Has poverty genuinely decreased since the war began? The short answer is no. Rosstat simply changed its calculations to align with President Putin’s May decrees, which require the government to reduce poverty to below 7% of the population by 2030. The Insider has thoroughly examined these statistical manipulations.

To get a more accurate picture of poverty in Russia, we can apply Rosstat’s previous methodology. While imperfect, it better reflects the purchasing power of ordinary Russians.

Who counts as poor?

Before 2021, poverty in Russia was clearly tied to the cost of goods and services. Today, the authorities have redefined the “poverty line,” identifying the poor as those whose income is markedly lower than the median income in the region, rather than basing it on actual purchasing power.

Previously, a person was classified as poor if their income fell below the subsistence level. This concept still exists, and it underpins much of the country’s economy. Pensions, social benefits, and many government programs are linked to the subsistence level, which serves as a benchmark for basic survival.

However, until 2021, the subsistence level was adjusted quarterly to reflect inflation and changes in the cost of a basic market basket. As of 2024, it is updated only once a year. This means that if someone falls into poverty, they are ineligible for benefits until the next recalculation officially recognizes their status and need for assistance.

Furthermore, the subsistence level is no longer tied to prices or inflation. A person is considered poor only if their income is markedly lower than that of other residents of their region, with no consideration of their purchasing power. The calculation now involves taking the median income of a region and multiplying it by 44.2%, a coefficient for which the government offers no explanation). Whether this amount is actually sufficient to meet basic needs is of no concern to officials.

Since 2022, the primary criterion for official statistics has been the “poverty line.” It is determined by the cost of the basic market basket in the fourth quarter of 2020, adjusted for accumulated inflation since then. However, this inflation is calculated based on the prices of hundreds of goods and services that low-income people typically do not consume — and which even wealthier people might only purchase a few times in their lives, such as fur coats, coffins, or trips to Greece.

Spending on rent or utility bills, which heavily impacts the poor, is largely excluded from the inflation calculation. Similarly, the rising cost of food — another significant burden for low-income households — is underrepresented. As a result, the income necessary for survival is deliberately understated through manipulative formulas. According to research by the country’s Central Bank, one in four families in Russia barely earns enough to afford food, or even falls short of covering basic nutritional needs. Meanwhile, food prices are increasing faster than most other expenses.

In most regions, the subsistence level is consistently higher than the poverty line, meaning that many who cannot afford to purchase basic necessities are nevertheless not counted as “poor” in the government’s statistics. According to official government calculations, anyone earning an average monthly income of 15,000 rubles (before personal income tax) was no longer considered poor in most regions. For 2023, the poverty line in Moscow was set at 22,100 rubles before taxes, 14,200 rubles in the Tver region, and 14,300 rubles in the Krasnodar region. Meanwhile, the subsistence level for working people in these same regions was approximately 24,800 rubles, 15,200 rubles, and 15,000 rubles, respectively. This means, for instance, that a working resident of Moscow earning 24,800 rubles a month is not classified as poor and is excluded from poverty statistics in Russia simply because their income exceeds the officially established poverty line.

How many poor people are there in Russia?

At the end of 2023, the government reported that 12.4 million people in Russia, or 8.5% of the population, were living below the poverty line. The Insider attempted to assess how accurate this figure is.

To start, the authorities are contradicting themselves with these statistics. Rosstat regularly publishes data on income inequality among Russians by region. This data is based on the average monthly income of each person (whether they are working, retired, on a stipend, receiving dividends, or running their own business). A region’s population is divided into quintiles, and in each group, the average income and other indicators are calculated. Using these figures, it seems that the number of poor people at the end of 2023 was actually higher than the 8.5% reported by officials.

In fact, the average earnings of the 20% of the population with the lowest income across Russia is 14,564 rubles, while the poverty line for 2023 was set at 14,339 rubles — an amount very close to the average of the poorest quintile. The Insider compared the average income of the bottom 20% in each region with the established poverty line. It turned out that the total population in regions where the poorest 20% have an income lower than the official poverty line for that region adds up to around 81 million people. Therefore, at least 16 million Russians in 2023 had an income below the poverty line.

A similar picture emerges from more recent data from Rosstat. Every quarter, the agency publishes estimates of the poverty line and the number of poor people across Russia, as well as income data divided into decile groups. Such data is not provided for each individual region.

Nevertheless, even with these figures, it becomes clear that by the second quarter of 2024, the poorest 10% of Russians had an average monthly income of 11,448 rubles, while the next 10% averaged 19,787 rubles. The poverty line was roughly in the middle of these values — around 15,300 rubles — meaning that the share of the poor could not be lower than 10% of the population (14.6 million people), and was likely closer to 15%. This is far from the 8.5% figure reported by Rosstat.

Based on this data, about 15 million Russians in 2023 had incomes below the subsistence level, which varied across regions from 12,000 rubles (in the Lipetsk region) to 36,000 rubles (in Chukotka). In the occupied Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia, and Kherson, the Russian government set the subsistence level even lower than 12,000 rubles (at around $4.50 per day), and did not even calculate the poverty line.

If poverty were still defined as it was before 2022 — based on the cost of the food basket rather than the inflation-adjusted figure calculated annually — at least 17.8 million people in 2023 would be considered poor, or 12.2% of the country's population. Therefore, although the number and percentage of impoverished residents (by official definitions) in the country did decrease in 2023 (compared to at least 20 million people in 2022, according to The Insider's calculations), the figures are still higher than in 2020, when 17.7 million people were considered poor.

The old formula for calculating the subsistence minimum is based on the basic food basket required for survival. From the end of 2020 to the end of June 2024, inflation totaled 34.4%, while the cost of the minimum food basket comprising the cheapest products in minimal quantities rose by more than 47%. And in some regions — the Republic of Altai (57.7%), Ryazan region (55.4%) — it rose by markedly more.

The markers set by the state to calculate the poverty rate clearly differ significantly from what Russians actually consider to be the minimum income needed to survive.

Since the start of the full-scale invasion of Ukraine, the annual strategic document of the Russian Ministry of Finance has stopped recommending what measures ought to be taken to reduce poverty. The 2022 plan mentioned income support for the population, inflation reduction, and the improvement of social assistance systems — including for low-income people. Now, fighting poverty is no longer brought up in the document — it has been renamed as “income support for the most vulnerable citizens.”

Are Russians' incomes growing?

Rosstat attributes the decrease in the poverty rate to the growth of incomes. Nominal incomes (without accounting for inflation) of Russians have indeed increased — since 2013, nominal income of the wealthiest group of Russians has grown by 103%, and by 32% since 2021. Income growth for the poorest citizens of the country has been even more significant — 117% since 2013, and 35% since 2021. Following the start of the full-scale invasion, the growth in nominal income among the poorest has been driven by social benefits (excluding pensions) and rising wages, as shown by The Insider's analysis, which is based on federal statistical data on socio-demographic issues.

However, it would be incorrect to say that the poor have become much wealthier as a result, as inflation hits them the hardest. Even with income growth, the incomes of this group remain near the poverty line. For instance, the average income of the poorest 20% of Russians (about 29.3 million people) in 2023 was under 14,600 rubles.

According to Rosstat, at least half of Russians earn less than 50,000 rubles per month, while only around 10-12% earn over 100,000 rubles. It is important to note that these average incomes include figures for people living in large cities, where salaries are usually much higher than in smaller settlements. Additionally, it has been found that poverty and low incomes in Russia are a gender issue: among those surveyed by Rosstat, more than half of women reported an approximate monthly income of less than 50,000 rubles, while for men, this figure was 34%. Women are also more dissatisfied with their income.

Wages and the war

In 2024, Rosstat reported a record growth in real disposable incomes of Russians, the highest since 2014 — 9.6% in the second quarter and 9.4% in the third quarter, compared to the same periods in 2023. This income growth is most often attributed to high payments to participants in the war in Ukraine, along with the resulting wage race in the civilian sector, which is also largely linked to the increase in state spending on the war. Experts from the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) believe that payments to the military have likely already begun to change salary trends across the country.

“The SMO [Special Military Operation] factor itself has played a role in what experts [from IEF RAS, the Institute of Economic Forecasting of the Russian Academy of Sciences] have long expected — a 'wage revolution' that seems to be unfolding right before our eyes. The fairly high payments to 'volunteers' automatically set a benchmark for the labor market (at least from the perspective of retaining workers). There is no doubt that after the completion of the SMO, this factor will remain: military servicemen who were earning 200,000 rubles per month or more will simply not return to their 'old' jobs paying 50-60,000 rubles per month and will, evidently, seek employment opportunities commensurate with their new social status,” writes Dmitry Belousov, head of the macroeconomic analysis and forecasting department at the CMASF, in “Thirteen Key Points on the Economy.”

The fact that the increase in income for Russians is driven by rising wages, rather than by other types of payments, is supported by data from Rosstat, which shows a growing share of income from salaries. At the same time, workers are shifting from “civilian” jobs to “military” ones. “The current geopolitical situation is prompting a shift in the workforce from civilian sectors, accompanied by a significant increase in wages. This is leading to a sharp rise in the average salary across the country,” explained Anton Prokudin, chief macroeconomist at Ingosstrakh-Investments, in a comment to RBC. Dmitry Belousov also asserts in his report that the major changes in income are a result of workers leaving other sectors to join the military.