What is Russia’s Middle Class?

29.05.2012

The democratic structure of society is contributing to the demand for a higher quality of life. The prosperous part of the middle class differs from the bulk of the population by its greater demand for democracy.

ValdaiClub.com interviewed Leonid Grigoryev, Professor, Head of the World Economy Department, Faculty of World Economy and International Affairs, National Research University - Higher School of Economics.

What is the structure of Russia’s middle class? How does it differ from its Western counterpart?

The middle class can be defined in terms of education and profession, income, property, financial stability, social behavior and by self-identification.

The upper middle class consists of people with a high level of income and financial stability, such as top managers, bureaucrats and a small part of the intelligentsia. They are able to vacation abroad several times a year, have a well-appointed flat, a house in the countryside and at least two cars. This is approximately what the upper middle class in the West looks like. The upper middle class in Russia makes up 4% to 7% of the middle class.

The middle-middle class consists of people with a higher education, a job, a flat and a car. Like their counterparts in the West, they have some savings but are only beginning to enjoy a degree of financial stability.

Taken together, the upper middle class and the middle-middle class constitute up to 30% of the Russian middle class. This figure was around 25% in 2000, which means that growth has been minor in the past decade.

The Russian lower middle class is similar to its Western analogue, at least in terms of education. It comprises people with a moderate income (secretaries, salespeople and desk clerks) and a passable education. In the West, lower middle class people also have some property and savings, but in Russia they are much poorer than the other two parts of the middle class.

Each of these three parts is subdivided into five groups: officials, the intelligentsia (budget-funded group), managers of large companies, and small and medium-sized business people.

Can further development of the Russian middle class have a positive impact on laws and taxes? What should be done in these areas?

Regarding legislation, laws should be checked for corruption loopholes and the real interests of the middle class should be determined, because laws are often adopted in the interests of elite groups rather than the middle class.

According to polls, business people are willing to pay taxes but they want the level of corruption to be scaled down and tax revenues to be used judiciously. To promote innovative development, we need to reduce taxes on highly-skilled labor.

Is the Russian middle class socially and politically partisan or apolitical? Or is it just “the silent majority”, as some political analysts claim?

In my opinion, the Russian middle class is, in general, more highly educated than its foreign counterpart. I would say that it is Russian medium-sized business people who are apolitical, while managers and the intelligentsia are politically aware. However, they have only started to become politically active after the shocks of the 1990s. What are the reasons for this? First, it is a natural response to corruption. Second, a new generation has grown up that has not had a revolution of their own and regards any events and developments they encounter and are willing to fight as a fact of life. And the third reason is high educational standards. What some people see as the middle class is often the intellectual elite. And the merger of the intellectual elite with the middle class produces a corresponding reaction to internal events and problems.

Which Russian political party better represents the needs of the middle class and why? Does the Russian middle class have a political basis allowing its representatives to take a civil or political stand?

The middle class is heterogeneous and hence is represented by several parties and movements in all countries. In Russia, part of the middle class (the two upper levels) votes for United Russia. Some support the country’s largest party by virtue of their position, while business people make a rational choice because United Russia is the ruling party. The few members of the middle class who support the Communist Party or the Liberal Democratic Party mostly made their choice long ago. A Just Russia also has a number of supporters among the middle class.

Some members of the middle class, predominantly the intelligentsia and private businesses, support liberal political parties.

The political preferences of the middle class and their reasons for supporting a political party do not differ from the preferences and motives of the politically active portion of Russian society. An active socioeconomic and public stand of the middle class means that they know the essence of power and its institutions.

The democratic structure of society is contributing to the demand for a higher quality of life. The prosperous part of the middle class differs from the bulk of the population by its greater demand for democracy. At the same time, it continues to waver between the demand for more democracy and a fear for the loss of stability and controllability due to the weakening of the power vertical.

How do sweeping corruption and legal insecurity influence the development of the Russian middle class?

This is a sad story. First, the selection of candidates for top positions can be described as a negative process. It is not the best candidates but very wily or corrupt candidates who are willing to compromise that are selected for posts that involve making political decisions. And second, bribes and corruption stifle innovation in business and in the intellectual sphere. The country’s negative investment climate is largely the result of corruption.

Does the majority of the middle class believe that Russia has a future or are they ready to emigrate?

Of course, most of them will remain in Russia. A considerable part of the intellectual elite, which could easily emigrate, have not done so. What keeps them rooted is the Russian language, culture and mentality. But a considerable number of business people are being squeezed out of the country by corruption and our tax system. In an attempt to insure themselves against problems, they export part of their income instead of investing it in Russia.

It is vexing that some of our talented young people and intellectual leaders – financial, IT, consulting, natural sciences and other leaders – emigrate because they do not have opportunities for self-actualization in Russia. Some of them go on to win Nobel Prizes. They have become an “international Russian-speaking middle class”.

Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.

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