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© RIA Novosti. Pavel Lisitsyn

Russia’s income inequality: the root of most evil

by Natalia Antonova at 11/10/2013 19:01

The issue of income inequality in Russia is nothing new. We are used to noting it - then filing it away somewhere as we get on with the rest of our lives. Rich people exist everywhere after all and it's not as if the United States, to give an obvious example, is doing too well in that department either.

Still, the numbers released on Wednesday by Credit Suisse are still staggering to behold. Thirty-five percent of Russia's wealth is owned by just 110 people. According to the same report, Russia has the world's highest rate of income inequality, barring a few Caribbean islands. While it should be noted that property data is not included in these wealth figures (Bloomberg's Leonid Bershidsky has helpfully pointed that out), the report is still dispiriting.

Natalia Antonova, Acting Editor-in-Chief

© RIA Novosti.

Natalia Antonova, Acting Editor-in-Chief

For the past couple of days, I have been reading the angry comments Russians have been making on the Internet regarding this news.  "What a shame," they are saying. "What a catastrophe."

If you ever wonder where modern Russian cynicism takes its root, or if you wonder why Russia's social institutions are so woefully underdeveloped, or if you wonder why modern-day feudalism exists in Russia, wonder no more. The stats on income inequality have laid the problem bare.

A modern society simply cannot function properly with this kind of wealth distribution. Not only does it hinder economic development, it also affects people on a psychological level. Why strive endlessly to better your existence when the social lifts are not simply broken - but seemingly nonexistent?

Russian economists have pointed out that this kind of wealth inequality is a major factor in a kind of "dumbing down" of the Russian labor market. Doctors and scientists are so woefully underpaid, for example, that the ambitious ones are either forced to seek their fortune abroad or else to work in marketing or sales simply to make ends meet.

Everything from serious tax reforms (including a much-debated luxury tax) to radical salary increases are being discussed as far as addressing the problem is concerned.

What's abundantly clear either way is that income inequality is not a problem that can be solved overnight with populist measures. Not only a major political will is needed to properly address it, there needs to be a more individual, more deep-seated shift in the understanding of how the world ought to work. Simply put, more and more Russians must understand that they deserve better - and that "better" involves a gradual and painstaking process. 

 

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