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Everything is getting more expensive. Except labor.

As expected, price increases resumed after the State Duma elections. And since November, new utility rates have been added. Meanwhile, wages have barely increased, and in some places, they're even declining.

Author: Tatyana Rybakova

We're not starving - and that's fine.

The fact that Russian citizens have started saving can be understood by many signs even without Rosstat, which is in no way will not recover after an attack by Belarusian cyber partisans. Shopping malls are experiencing a massive close Stores and fashion bloggers are increasingly sharing tips on how to refresh your wardrobe without buying new clothes, and discount campaigns seem to be nonstop. However, the statistics are also impressive. Laptop sales since the beginning of the year collapsed by 20%, sales cars — by the same 20%.

But until now, the conversation has focused more on non-food items. Now it turns out that Russians are cutting back on food as well. And it's not just about switching to cheaper products and shopping at hard discounters—they're also reducing the variety and quantity of food purchases.

On According to According to the analytical company Focus Technologies, traffic to medium- and large-format grocery stores (department stores, supermarkets, and hypermarkets) in Russia decreased by 2-7% year-on-year from January to September. Hypermarkets, previously the most popular format, experienced the largest decline—down 10,4%. Traditional stores lost 7% of their customers, specialty grocery stores lost 2,5%, and supermarkets lost 1,2%. Only hard discounters, which sell a minimal selection at the lowest prices, saw an increase in traffic.

The reason? Grocery prices are rising. Suffice it to say that, despite shoppers' shift to austerity, the average bill from January to October still increased by 6%—exactly the amount of inflation declared by the government. Retailers are, of course, taking measures to bolster their profits: they're reducing store space and product selection, using more private-label products (they can be ordered from unknown, and therefore cheaper, regional producers), and are more willing to purchase products with reduced weight and volume (so-called shrinkflation). But so far, the decline hasn't been reversed.

The reasons are clear: food prices are rising. Although according to Rosstat The overall growth of consumer prices since the beginning of November has been slightly negative (-0,01%), food prices have increased by an average of 0,31% since the beginning of November. Moreover, basic products rose The price of mangoes, which are currently rising worldwide due to crop failure, has increased by 13%. Beets, the fresh harvest of which was just about to hit shelves, have risen by 23%. Bananas, another price leader, have gone up by 10%, while onions (again, freshly harvested) have risen by 24%. There are, as always, many reasons, but the main one stems from a macroeconomic pattern: with high inflation and falling real disposable incomes, it's cheap, basic foods that rise in price the fastest. This is simply because demand for them is growing, in part due to those switching to cheaper diets. Late tomatoes might be desirable, but even after a 17% price drop, they cost almost 225 rubles per kilo. This is why people are buying potatoes at 47,7 rubles after a 17% price increase.

It is not surprising that the leaders in price increases are again chicken meat: it is still the cheapest. They are getting more expensive too. eggs, which partially replace meat in terms of protein: in the last week alone, the growth was 1,4%.

Result: for food Russians spend almost 40% of their income on food, a record high for the past 16-18 years. This isn't Africa, of course, where food spends 50%, but it's a far cry from developed countries, where food accounts for 12-20% of income. As one online discussion about the latest round of rising food prices put it: "We're not starving, so that's good."

European prices, African quality

And since the beginning of November, citizens have been “delighted” bills Housing and communal services, which saw their rates increase on November 1st, are a major concern. Despite the fear-mongering from journalists, the reality in some places turned out to be far more dire: while the average increase was announced at 15%, the actual increase was significantly higher. For example, in Serpukhov, utility bills for a one-room apartment now reach 10 rubles, and for a three-room apartment, 33. In Tyumen, rates increased by 25,7%, but the record was probably set in the Tomsk region: residents of Melnikovo were charged 43% more for heating and a whopping 103% more for hot water.

As a result, utility bills in Russia today are not only on par with Eastern Europe, but in some places have even exceeded them. This is despite the fact that the quality of utilities remains appallingly low, with no sign of improvement. Not to mention that Russian wages and pensions have long since lagged behind those in Eastern Europe. For example, in Bashkortostan, utility rates increased by "only" 10,7% on average, but, as one resident complained, with a pension of 16 rubles, rent now stands at 9,6 rubles—as the saying goes, you can live without denying yourself anything.

And that's not the end of it: a new tariff increase is coming on July 1st. Residents of the Lipetsk region have already been warned that water disposal costs will increase by 45,9%: Rosvodokanal Lipetsk lacks funds to modernize its aging networks and treatment facilities. Asking where the money from previous increases went is pointless: "We already ate what you sent last week."

Inflation has decreased, you say?

Rosstat claims that overall inflation in Russia has fallen compared to last year and stands at 6,35%. However, Rosstat itself admits that the tariff increase from October 1 has given inflation a "new lease of life." According to it, estimated, it increased from 0,12% to 0,96% per week. But that's assuming the promised calculations: water disposal increased by 17,1%, cold water by 15,3%, hot water by 14,2%, heating by 12,7%, and electricity by 12%. And as it turns out, the actual increase is often much higher.

However, while absolute inflation figures from Rosstat are not reliable, dynamics and trends can still be discerned. Based on these assumptions, noticeIt's clear that a peculiar "leveling out" of regions is taking place in Russia: those regions that have historically had lower prices and tariffs (and, it should be noted, lower incomes) have now become the leaders in inflation. For example, almost all the republics of the North Caucasus have emerged as the leaders in inflation growth: in Karachay-Cherkessia, it was 7,26% (according to Rosstat), in Dagestan - 7,47%, in Stavropol - 7,56%, and in North Ossetia - 8,68%. In impoverished Kalmykia, inflation reached 8,33%, and in Kamchatka, where logistics are expensive, 8,33%. However, inflation is also raging in prosperous regions: in Chuvashia - 7,99%, in Samara Oblast - 7,73%, and in Tatarstan - 7,13%. In Krasnoyarsk Krai, prices increased by 7,29% over the year, in Novosibirsk Oblast – by 7,01%, and in Sverdlovsk Oblast – by 6,77%.

The reasons are varied: for example, Kamchatka suffers more from rising food prices (almost everything is imported here), while in the Sverdlovsk region, the prices for fuel, electronics, and educational services have risen the most.

Only incomes are declining

While Rosstat claims that Russians' real disposable incomes are growing, citizens themselves see something completely different. according to FOMLess than 10% of respondents believe their financial situation has improved in recent months, and in early October, this share dropped to 6%—the lowest since 2016. This is a case where trust lies not in official figures, but in citizens' self-perceptions. This is especially true given the growing evidence that wages, the main source of income for the majority of the working population, have either stopped growing or are even declining.

So, once again postponed Reform of healthcare workers' salaries: there is no funding for it in the Mandatory Medical Insurance Fund budget. More and more regions are refusing index salaries for public sector employees—again, due to a lack of funds. What's there to talk about if the number of regions, reduced Payments to those fighting in Ukraine have reached 15.

Moreover, there is a wave in the public sector abbreviations — that is, people are losing their incomes altogether, even if they're modest. Moreover, in small towns and depressed cities, finding new work is unrealistic for many: yes, due to the small population there, this has little impact on overall unemployment figures, but it has a significant impact on their purchasing power.

The same can be said for residents of large cities, who previously worked in the highest-paying sectors. Social media is full of complaints from IT specialists and marketers: the first six months they couldn't find work at all, while the second were offered jobs—but were only willing to pay a percentage of sales. This is understandable: both served primarily the growing consumer economy. Now the consumer sector is shrinking, and these specialists are simply no longer needed.

Looking at the macro level, the picture is grim. The high Central Bank interest rate is putting pressure on the civilian sector of the economy, which is suffering from expensive loans and falling demand, forcing people out of it and into the military and paramilitary sectors. But the military sector, even with the current enormous budget expenditures (around 40% of all expenditures), still accounts for only a tiny share of the Russian economy: according to expert estimates, estimatedThe defense industry's contribution to overall GDP is approximately 6-8%. Consequently, it simply cannot absorb all those expelled from the civilian sector—even without taking into account their specializations and desires.

And those who are needed are mostly low-skilled workers for assembly lines. The need for IT specialists, for example, is negligible, and marketers needn't worry at all. And even there, the salaries aren't nearly as rosy: for example, one former IT specialist described his joy on social media: after training as a welder, he managed to land an excellent salary of 80 rubles. True, the work is done in shifts, month after month, meaning the actual salary is half that (but he insists he earns extra money in his previous field between shifts). And judging by the evasive job description, these are shifts in the occupied Ukrainian territories, with the attendant risks.

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On the one hand, there's near-zero economic growth, on the other, rising prices, tariffs, taxes, fines, and massive layoffs, especially in the public sector. This is a classic sign. stagflation — a phenomenon that severely battered the United States and Western Europe in the 1970s and 1980s. Back then, the USSR was enjoying rising oil and gas prices (though this ultimately didn't help), and although it invaded Afghanistan in the late 70s, the costs of the war were far lower. Today, Russia is inexorably heading toward the same thing that afflicted the West almost half a century ago. Back then, stagflation was accompanied by mass protests (recall the "student revolution" in France in 1968 or the anti-racial and anti-war protests in the United States) and even terrorism (Italy and Germany). Whether the Russian population will maintain its famous patience under such conditions remains to be seen.