Putin’s War in Ukraine has Made Rich Russians Richer but Poorer Ones Poorer, Statistics Show

Paul Goble
    Staunton, Feb. 19 – Despite the Kremlin’s boasts about income growth as a result of the war in Ukraine, Russian government statistics show that the war has not affected all income groups the same. Instead, economist Berta Shapiro says, since the start of the war, the rich in that country have gotten richer and the poor poorer.
    Moreover, she says, polls show that the Russian people are well aware of this, an understanding that is likely to grow given that the trends she describes are likely to intensify given that job seekers will increasingly want to be paid more than employers can afford to do (theins.ru/ekonomika/278568).
    Even Rosstat acknowledges that those in the richest 10 percent of the population have seen their incomes rise twice as fast as those in the poorest 10 percent, Shapiro reports; and the figures are likely higher than that given that the wealth hide their wealth and the poorer are more seriously affected by rising inflation.
    Other economic changes since the start of the war have widened this gap further. Rising interest rates have allowed the wealthier Russians to earn more, while poorer ones can’t take advantage of these. The withdrawal of Western firms helped those at the top but not at the bottom, while sanctions have hurt those at the bottom more than those at the top.
    And perhaps most importantly, those at the top who have benefited have not been affected by the cutbacks in government transfer payments that represent a sizeable portion of the incomes of those at the bottom of the income pyramid. Indeed, they are largely insulated from such changes.