Real incomes of Russians increased by a record 9.6% in Q2

By Paul Jouvenet, correspondent. Eurasia Business News, August 5, 2024. Article n°1131.

Real disposable income of Russians (net of inflation and mandatory payments, such as taxes and interest on loans) increased by 9.6% in April-June, according to Rosstat agency data. This is a record figure since 2013, when the methodology for calculating the indicator changed. The last time real incomes grew at a rate close to the maximum was in the first quarter of 2022 (by 8.9%). Compared to January-March, the growth of real disposable income of Russians hit 8.7%. In the first half of 2024, the figure increased by 8.1%.

Such an increase in income is primarily a consequence of a shortage of personnel. The unemployment rate fell to 2.4% in June, hitting a new all-time low. In May, the figure was at the level of 2.6%. Earlier, the Central Bank warned that in the second quarter, the provision of personnel updated the historical minimum in the history of observations. According to the monitoring of enterprises conducted by the Bank of Russia, there was a shortage of engineers, installers, IT personnel, warehouse workers and drivers.

The most acute shortage continued to be experienced by Russian manufacturing enterprises producing investment and consumer products. The head of the Central Bank, Elvira Nabiullina, noted that 75% of Russian companies complain about the shortage of personnel.

The problem of personnel shortages on the Russian work market, the training and competition in the labor market will stay in the coming years, Minister of Economic Development Maxim Reshetnikov said last February. According to Reshetnikov, this is now one of the main risks in the Russian economy.

How did incomes grow?

Cash income (on average per capita) amounted to 58,191 rubles in the second quarter, which is 16.8% more than in the same period last year. The acceleration in growth was mainly due to higher wages. In the structure of monetary incomes of the population, the share of wages increased from 59.9% in the second quarter of 2023 to 62% in April-June 2024. At the same time, the part that falls on social benefits decreased to 17.3% from 19%. Earnings from entrepreneurial activity in the total income structure also fell – by 0.9 percentage points to 5.9%. Other revenues, including shadow income, decreased from 7.5% to 6.6%.

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The growth of incomes was also accompanied by an increase in household expenditures – they increased by 13.9% in the first half of the year compared to the same period last year. And Russians spent about 3 trillion rubles on savings in January-June (in 2023 for the same period – 1.8 trillion rubles).

The Central Bank of Russia has increased its growth forecast in 2024 by 0.3 p.p. to 3.2%. Analysts expect Russian GDP to grow by 1.7-1.8% in 2025-2027.

The IMF forecast the Russian GDP growth to reach 3.2% in 2024 and 1.5% in 2025.

Wages of Russians

Real wages in May increased by 8.8% in annual terms, nominal (before taxes) – by 17.8%, according to Rosstat. For five months, the growth of real wages amounted to 10.1%, nominal wages – 18.7%. On average, one employee in May earned for 86,384 rubles (around 927 euros).

The highest growth rates of wages in May were observed in the field of leisure, recreation and sports (by 29.5%), in the production of clothing – by 27.2%, coke – by 26.8%, in administrative activities – 26.6%, in wood processing – by 25.5%, in the financial and insurance sectors – by 24.8%, in the activities of extraterritorial organizations (including diplomatic missions) – by 24.7%. Also, wages in the production of finished metal products, computers and furniture grew at a rate of more than 23%.

In absolute terms, the highest salaries were traditionally observed in the fuel and energy sector – in pipeline transport (311,205 rubles), in oil and gas production (211,339 rubles), as well as in the financial and insurance sector (185,792 rubles).

Regional Breakdown

The lowest unemployment rate was recorded in Moscow (1%), Novgorod and Nizhny Novgorod regions (1.3% each), Khanty-Mansiysk, Yamalo-Nenets and Chukotka districts, in the Khabarovsk Territory (1.4% each), Bashkortostan (1.5%). At the same time, a high level is observed in the North Caucasus Federal District – in Ingushetia, unemployment in May amounted to 26.7%, in Dagestan – 10.8%.

In May, wages in the sectoral context grew at the highest rates in the Kurgan Region (by 30.1%), the Stavropol Territory (by 24.8%), Udmurtia (by 23.5%), the Bryansk Region and the Trans-Baikal Territory (by 23.4%), as well as in the Pskov Region (by 23.1%), the Chelyabinsk Region (by 22.9%), the Smolensk Region (by 22%), as well as in the Republic of Mari El (by 22%).

What professions are in demand in Russia in 2024

Drivers, loaders, delivery men, sales representatives and promoters have become especially in demand now, reported the Sovcombank. Since the beginning of 2024, drivers – 417 thousand and couriers – 115 thousand – have been looking for the largest number of published vacancies. Russian companies also lack 70 thousand loaders, reported Lenta.ru with reference to the data of the hh.ru portal.

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Russian retail chains, companies in the field of delivery and transportation, both freight and passenger, are now primarily facing a critical shortage of personnel, especially if they operate in cities with a population of over one million. In Moscow and St. Petersburg, there are only one and a half to two resumes per vacant driver’s seat, which is significantly lower than the national average.

This shortage of workforce fuels the growth of the average wage on the Russian job market.

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© Copyright 2024 – Eurasia Business News. Article No. 1131.