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On middle class and people’s incomes (interview to TASS)

March 18, 2020

The 16th part of Vladimir Putin's interview to TASS News Agency has been published.

The 20 Questions with Vladimir Putin project is an interview with the President of Russia on the most topical subjects of social and political life in Russia and the world. Total recording time is 3.5 hours.

Andrei Vandenko: The middle class. Where have we lost it? We were told it would account for more than a half of the population.

Vladimir Putin: Listen, do you know what the middle class is? If you think that the term “middle class” is about the way people live in France, Germany or the United States, this is not so.

The middle class is different in different countries. There is a relevant methodology of the World Bank. The middle class is estimated using the number of households, of people whose incomes are 50 per cent above the minimum wage. This year’s minimum wage is, if I remember correctly, 11,280 rubles, while the average wage is far higher. There are a lot of such people, well above 70 per cent.

Andrei Vandenko: Then our middle class should rather be called ‘middling’.

Vladimir Putin: You know, we have to proceed from the realities.

Andrei Vandenko: Within one's means.

Vladimir Putin: Not within one's means but using the methodology of the World Bank. ”Within one's means“ is a very unclear formula. The World Bank's methodology, however, suggests that each country has its own middle class. So do we. Our task is just to make this middle class stronger. 

Andrei Vandenko: I wish it were like in France or Germany…

Vladimir Putin: Boost incomes…

Andrei Vandenko: Vladimir Vladimirovich…

Vladimir Putin: I would not like it to be like in France.

Andrei Vandenko: Don't you?

Vladimir Putin: Just look at what is happening there. Is there anything good about it? Protests there continue nonstop, right? Whole branches of the economy are stalled. The unrest left 11 people dead, many were injured, lost their eyes to rubber bullets. What is so good about this? Is this what you wish? I do not think so.

Andrei Vandenko: The people in France went to the streets. 

Vladimir Putin: Yes.

Andrei Vandenko: Macron made a move, then backtracked.

Vladimir Putin: Is this a good thing?

Andrei Vandenko: I do not know. For the French people it probably is.

Vladimir Putin: I do not think so. Firstly, fundamentally nothing has changed. In the context of the reform, the most critical issue, as I see it, was the one related to early retirement and basically equal treatment for all.

From the economic standpoint, this is actually reasonable. Pragmatically, President Macron, on the whole, is doing the right thing. We, pragmatically speaking, have done the wrong thing because we have left in place practically everything – retained almost all the privileges, all privileged categories. We still have early retirement, while in France this is the principal reason for discontent – that early retirement plans are being canceled.

Andrei Vandenko: Early retirement has remained for the military and for the law enforcement agencies.

Vladimir Putin: Where?

Andrei Vandenko: Here, in Russia.

Vladimir Putin: Not only for them. It has been preserved for coalminers, for instance, and for other categories. It has remained for teachers. We have many groups entitled to preferences. Moreover, for mothers of large families the retirement age is 50.

We need to fulfil a very important task – to raise people's real incomes. We should think about the best use of the available resources, which are big enough. Our National Welfare Fund has exceeded 7 per cent of the GDP – to be more precise, it is 7.3 per cent.

Next summer, in July, as far as I remember, funds are expected to be credited to our accounts and we are getting to the point when we will begin to spend the NWF more actively – we agreed upon it before, we made a decision to do it when this reserve fund, and we have only one reserve fund left, the NWF, exceeded 7 per cent. The question is on what we should spend the money: on investment, on support for certain groups of the population, etc. This is what our discussion is revolving around today.

March 18, 2020