Notes on Russian Economics-Income (long)

[ChuckRM]

Although, hopefully, we marry for love, in the US many marriages founder on financial issues.  There are still major differences between the economic situations of Russians and people in the west.  These differences come up during correspondence and become more acute when you start to live with your RW.  Here are a few observations that I have culled from newspaper accounts, correspondence, and personal observation.  These observations pertain specifically to the Russian Federation (the country that my wife is from).  Guys interested in women from the Ukraine or other FSU countries will need to insert different numbers.  Some points may be generally applicable.    

1) Wages in Russia are very low compared to Western Europe/Canada/US.  Here are some numbers taken from recent reports in the Moscow English language press.

According to Russian government statistics real wages increased 16.7% between June 2000 and June 2001.  However, the average wage was only $114 per month, less than August 1998 (pre-devaluation) average of $150.00.  [Russia Journal; Aug. 3, 2001]

“The1998 financial crisis slashed the average monthly wage from $150 to $60, and even the steady economic growth of the following three years hasn’t been enough to bring living standards back up to pre-crisis levels.”  [Russia Journal; Dec. 21, 2001]

Wages are even lower in some of the other FSU counties. A recent Moscow Times report (March 27, 2002) provided the following view the Ukraine’s economy:  “Gross domestic product grew a record 9.1 percent last year helped by stronger exports, growing domestic consumption and a good grain harvest.  In 2000, GDP rose by 5.8 percent.  Inflation is low and the hryvnia currency seems stable.  But people remain desperately poor, with salaries averaging $40 a month.  Unemployment is high, the shadow economy is flourishing and corruption is widespread.”  

Contrast this with the U.S. situation:

This spring, Parade Magazine (March 3, 2002) reported that: “In 2001, the median weekly salary for all workers (in the US) was $597.” or $2,388 per month.  Currently, the US minimum wage is $5.15 per hour.  Assuming a 40 hour work week, a worker paid at this level would earn $824 per month or $9,888 per year.  So, the Russian average is approximately 14% the U.S. minimum wage.

We face problems of scale when dealing with people from the FSU.  If you get requests for money from over there, it may help to think of them in terms of the average wage there.  So, if someone asks you for $100, that’s nearly an average monthly salary in the Russian Federation and more than two month’s wages in the Ukraine.  

Over here, someone from the FSU is going to have to adjust to radically different wage scales as well.  My wife thinks that the U.S. minimum wage  is “wonderful’ and I tell her that it is really difficult to live on such a small income here.  One of the other students in her ESL class makes $12,000 a year cleaning hotel rooms.  She thinks that this person is doing very well.    

2)  There are major differences in wage levels between regions within Russia.  Wages tend to be higher in Moscow than in the provinces (except for some of the Arctic regions).  

According to a recent newspaper report “Muscovites’ average annual personal income rose from about $2,500 in 1999 to $6,000 per capita last year.” “Most of the country’s middle class is in Moscow and St. Petersburg” [Moscow Times, April 18, 2002].

When I went to visit my wife in Omsk (western Siberia) in the fall of 2000, I sat next to a young man from Kiev, who was living in the U.S., but going back to visit relatives.  We had a long talk about conditions in the FSU.  One of his observations was that “Moscow was like a separate country, compared to the rest of Russia.”

During my visit to Omsk, I was told that an average wage there was about $50 a month.  I hope that wages have gone up there since my trip.  However, the letters that my wife receives from home tell of rising prices and a scarcity of jobs, but say little about rising wages.

The Moscow Times occasionally publishes articles profiling economic conditions in particular Russian provinces.  The Nov. 30, 2001 issue had a profile of the province of Mordovia, located in European Russia southeast of Moscow.  It was stated that: “the average monthly wage in Mordovia is about $60.”  So, it seems that the situation there is more similar to Omsk than Moscow.  

3)  Reality is worse than these numbers suggest.  Russian employers sometimes don’t pay their employees’ wages on time.  It seems that governments (federal, regional, local) are the worst offenders.   We think of government jobs as pretty “safe” in terms of salary and benefits, but over there it “ain’t necessarily so.”   John Helmer in the Russia Journal (Feb. 15, 2002) called “non-payment of wages or wage arrears – the infamous tax invented by former President Boris Yeltsin, Yegor Gaidar and Anatoly Chubais.”  Supposedly, the wage arrears problem has lessened under President Putin, but wage arrears have not been eliminated.  

This may be something to watch out for when writing to people over there.  Two years ago learned about the wage arrears problem while I corresponding with a woman in Omsk (not my wife, another woman).  At first, she claimed that she was doing well working for a state-owned enterprise, making $90 per month, an above average wage for Omsk.  Her agency suggested that I send some money to her by Western Union to help pay correspondence costs.  So I did, thinking that then we could send messages to each other more often than once every two or three weeks.  After I sent the money, I didn’t hear from her for a couple of weeks.  Then, I finally got a message from her confirming that she received the money and apologizing for not writing.  She went on to say that she had just gotten another job and was suing her old employer because she hadn’t been paid in nearly a year.  So, I suppose that the money I sent her probably went for legal fees, or maybe food?  Was she a scammer?  I doubt that she was corresponding with 100 other guys (she was too old), but she was not very candid with me about her situation.  Maybe desperate people do odd things?  Anyway, I dropped her not long after that.  

4)  Working conditions are likely to be poor and hours longer that the standard work week in western countries (40 hours in the US, less in some European countries).   I don’t know if they have a standard work-week in the FSU countries, but it seems that a lot of the people with jobs there are working more than 40 hours per week.  Complaints about long working hours were voiced by several women that I wrote to, my wife included.  This may be a reason why your gal doesn’t write as often as you would like.

5) Salary levels in Russia do not relate very well to levels of education.  Jobs that require university or advanced degrees may never-the-less pay very low wages.  

“Among the most poorly paid groups are millions of highly educated public-sector workers in such vital areas as education, health and culture.  They earn 56-60 percent of the average national wage and 44-47 percent of wages in the industrial sector.  This means that many teachers, doctors, librarians and people working in theaters and museums are struggling financially”  [Russia Journal; Aug. 3, 2001].

“The miserly incomes of teachers and doctors create serious problems for the whole population, as people look for other ways of supplementing their incomes.  In practice, this means that free and accessible education and health care are a myth these days.” [Russia Journal Dec. 21, 2001].

Last December, the Kremlin announced that it would double public sector wages in 2002.  In practice, it seems that 90% of the cost of the wage increases was passed on to the regional governments.  Here in the US, we would call this an “un-funded mandate.”  Otto Latsis in the Russia Journal (Dec. 21, 2001) expressed doubt that the government had enough money to fund the wage increase.  He predicted that this would lead to more wage arrears.

We have a sense here as to what jobs pay well and which jobs do not.  Forget this when you deal with people in Russia because most of it doesn’t apply.  There are a lot of women on the Russian internet sites who claim to be doctors, teachers, even university professors.  When I started writing to people over there, I was skeptical about these claims.  I wrote to some, including a university professor in Novosibirsk, out of curiosity.  Based on the correspondence, it seemed that she really was what she claimed to be, but we were not compatible.  I corresponded with another woman in Novosibirsk who claimed that she had to quit a university teaching position because she couldn’t live on the salary that it paid.  She got a job as a financial manager with a German-owned company instead.

[apk]

... in response to Notes on Russian Economics-Income (long), posted by ChuckRM on May 6, 2002

My wife from Moscow tells me that she was always paid from her salary in US dollars ($600 per month) and she was also paid a small amount in rubles (about $60) in which only the rubles was reported and taxed on...so it seams that under reporting of income is the way of life in Russia. She tells me that those in Moscow that work in shops or markets are very well paid due to the fact that many skim the profits and under-report it to the government.

Statistics are not what they appear to be, so it is best not to assume that all Russians are starving or underpaid.
Given the fact that most own their own home (it was given to them after Paristoika) and their only real expense is food and entertainment. Most things are dirt cheap compared to here although they pay the same prices for many things that we do also-by way of the internet.

[ChuckRM]

... in response to Russian economics.., posted by apk on May 7, 2002

No doubt, there are a lot of people in Moscow who are doing very well.  There probably are people in some other cities who are doing well, too.  I kept hearing from the folks in Siberia that Moscow was the place to be.  Everything is bigger and better in Moscow!  I spent a week with my wife in Moscow and we visited some of the tourist spots - Red Square, the Kremlin, Arbat Street, etc.  It has been interesting to watch her reactions.  When she first came here, if she liked something she would compare it to Moscow.  For example, the local shopping center got the "like Moscow" stamp of approval.  She doesn't do that so much now.

What sort of business was your wife in?

My wife lost her job about a month after I went to visit her because her employer went out of business.  She had to take a job in a shop that sold "produkti" and was paid the equivalent of $3.00 for a 15 hour shift.  She says that the shop had no place for staff to take breaks and they were on their feet for the entire time.  Sound fun??

Do you think that a teacher who works for the state will get most of her salary in U.S. dollars, tax free?

[Bob S]

... in response to Notes on Russian Economics-Income (long), posted by ChuckRM on May 6, 2002

Yes, the actual income in terms of dollars is low, but so is the general cost of living.  Rather than looking at dollar figures which are skewed due to currency conversion rates, one should look instead at hours of labor required to obtain basic needs.

A couple good links to give you an idea on this from another person who often travels there is:
http://www.WomenOfSouthernRussia.com/faqs/cost_of_living.htm
http://www.WomenOfSouthernRussia.com/faqs/money_debate.htm

[ChuckRM]

... in response to Relative Russian Economics, posted by Bob S on May 7, 2002

The Russia Journal has been running a series of short articles on the cost of various necessities in Russia.
Alexander Kondorsky, the writer, is a journalist and not connected with a marriage agency.

The link for this newspaper is: http://www.russiajournal.com

I have shown several of his articles to my wife.  She says that the prices quoted are Moscow prices.  

They get a big break on housing costs and many food products are much cheaper there.  Public transportation is definitely cheaper (3 rubles to ride the bus). But the cost of most imported items is roughly the same as here.

Are the cost advantages enough to offset the low wages?

[Del]

... in response to Relative Russian Economics, posted by Bob S on May 7, 2002

situations and times is, as you suggest, "How many hours of work are required?".
My first brand new vehicle 'consumed' about 500 hours (gross) of my labour - now it takes more than twice as long!
In most case in FSU countries, the big problem is 'underpayment' - that is the wages are very low relative to the cost-of-goods.
For instance, gasoline (benzene) is almost the same as what we pay, yet this "cost" is a much larger multiple of one's earnings there.
That said, the "cost" of public transportation (often much better than our own) is significantly less (in terms of 'labour' required to pay for it).
And, don;t forget that 'survival level of subsistence' is relatively less 'costly' in the FSU countries than it is here.

[yoe]

... in response to Notes on Russian Economics-Income (long), posted by ChuckRM on May 6, 2002

Moscow highest some of the highest rents in the world.
Many and I mean many Russian girls own $2000+ fur coats.
Moscow is one of the most expensive places to live in the world.
How do they do it on $150 a month-they don't
What you must understand is that is what the Government give them. They barter, trade and pay each other  for services. My wife made over $400 per week in the airline ticket business. How? Because people pay for 'good service'. Her mom makes $50 per week. She also lives in a town near Novisibirsk. She also makes money baking and the such for others. While Rual groups may suffer-have you been to Kentucky, Alabama, try Mississippi-the big cities folks make money-if they want. Just like the good ole USA. Yes there are many more wealthy people in America-but they are Greeks, Arabs, Israilites, Chinese, Koreans-should I go on. The thing about the Russians-they have not sold their country. so talk to some Russians who are making it. If you want to compare-How many people in American towns are pullin in six figures-not many. Poverty is very much alive here. The difference is-the Ruskies have each other. Here we feed off the weak-or visa versa.
2 cents
Joe

[KenB]

... in response to Things are not what they seem.............., posted by yoe on May 7, 2002

I detect a bit of racism or is it resentment in your post. Last Saturday I had a meeting at a very exclusive hotel inside of which was a jewelry store. The owner who is Iranian is very well-to-do. He worked hard and long to develop his store for many years. The same is true for many Koreans, Chinese, etc. The beauty of this country is the capacity to be successful is there for anyone with a dream, a work effort, and yes some good luck. Not so in many other countries. In the FSU, Ukraine, Moldovia, much of the wealth is owned by those who are connected or corrupt. I've been to all three and the Mafia is very pervasive and out in the open. A three year old child could pick out who is 'connected' for they are so blatant about it. Unfortunately the government is powerless and so corrupted that there is no clear remedy in sight. The recent artcle on prostitution which is endemic and atrocious with it's abuse of women is an example of this corruption. Sadly an official in Moldovia who supposively is overseeing this and job is to prevent such abuse and prosecute just blamed the women. Where do you think most of his income comes from.

[yoe]

... in response to Re: Things are not what they seem.........., posted by KenB on May 7, 2002

hard work only made those rich--------------who were paying little for the hard work.
I am not talking your middle class who think they are rich-I am talking about the people who are writing checks for 5 mil. + for a condo on the beach. Check with any realtor.

[yoe]

... in response to Re: Things are not what they seem.........., posted by KenB on May 7, 2002

For one I am not racist. I was just acknowledging that our 'wealthy' country is determined not by our wealth but by outside monies. There is no real American way-check any large company portfolio.
Second, a three year old child can barely detect what is edible from the floor. But, at least a three year old would not be so naive as to belive that he or she could look at a person and determine their occupation-unless of course the preson was wearing a badge or uniform. One thing about Americans is that they watch too much tv. How many mafia have you seen in the usa-how many prostitutes...........I thought so. But guess what-------------they are here-just check your yellow pages under escorts or go to one of the dozen nude clubs-those are just the legal ones.(not all of these girls are payed or sex of course)then again maybe all we all pay for sex.............if you really think about it.
Andn lastly, if Russians are so poor, the men don't work and all the women are prostitutes-who is paying for the women? the mafia////////
Again too much tv. Check out taipei or tiajuna if you want to see a real mess. Or, better yet go to Gary Indiana or southside of Chicago..........
I do not have the answeres, I just know that 'they' whoever they may be, are in most cases no worse than 'we' in the big picture.
Joe

[David24]

... in response to Well your not correct.......well on any ..., posted by yoe on May 7, 2002

Sorry, but you sound pretty ignorant..have you ever been to Taipei, Taiwan? It's a first world asian country..not sure how you are comparing that to Tijuana. The average person in Taiwan earns a salary nearly equal to an average person in the UK. It's called the silicon valley of Asia for a reason..don't believe me? Check the statistics in the CIA world fact book. Yes, I have been there before..and it's definitely not a poor country. Sorry man but you sound like a racist disillusioned American with no clue about how the world really is.

http://www.cia.gov/cia/publications/factbook/

[keithandkatya]

... in response to Well your not correct.......well on any ..., posted by yoe on May 7, 2002

as usual the typical blame America first mentality... but nothing I will say will change this hatred inside your soul... and this is a forum for helping those looking for wifes overseas... and you have found a wife.. congrats... any good advice you have offered in the past is appreciated... and hopefully you will stay on subject in the future and offer more...

[Zink]

... in response to and as usual you are not correct either...., posted by keithandkatya on May 8, 2002

Why do you think that Yoe is blaming the US or hates his country? My interpretation was that people shouldn't be so quick to condemn other countries for their problems because we have our own. And often they are the same ones.

Prostitution/sex slavery, drugs, gangs/mafia and corruption are alive and well wherever humans live. It's a world wide problem not just a FSU problem. It's easy for people who live nice, comfortable lives to ignore the fact that some people who live here have a rougher time of it.

[yoe]

... in response to Re: and as usual you are not correct eit..., posted by Zink on May 8, 2002

that is al I have ever tried to say.............but I am always taken as a bigot or an anti american...........when in truth I am just the opposite. I consider myself a world citizen. But thanks again for having enough upstairs to be diplomatic and see both sides.
Joe

[keithandkatya]

... in response to Thank you very much,,,,,,,,,,,,,,,,, posted by yoe on May 9, 2002

all the best,
keith