The slowdown in wage growth means that real income in 2019 will not increase
2019 may not justify the New Year hopes of the Russians on the growth of their well-being. Salaries of the Russians in 2018 grew at a high rate, but they could not ensure the growth of real disposable incomes, which, following the results of the year, are likely to be in the negative zone. Due to slowdown in wage growth this year, the same picture may continue at the end of 2019.
For 11 months of 2018, real disposable incomes of the population decreased by 0.1% compared to the same period a year earlier, says the Deputy Director of the Center for Development of Higher School of Economics Svetlana Misikhina.
Revenue growth in 2018 was mainly due to a 7.4% increase in wages in January-November, but growth rates slowed down by the end of the year (9.5% in the first quarter), and due to the hidden part of wages, the real growth rate of wages may be more modest - 3.6% for the three quarters of 2018, Ms. Mishikhina notes. The wages of state employee grew much more noticeable - by 27.4% - over the first three quarters of 2018 on the basis of Presidential May decrees (but even their growth rates slowed down), but at the same time the number of these workers decreased on average by 5.1%.
In 2018, even a high wage growth rate could not prevent a fall in real incomes. In 2019 the rate will slow down and, according to the year results, could be about 1.5% for the whole year. If this happens, the fall in income will continue de facto six years in a row, which will be a record since the first half of the 1990s.