Manifestations of Economic Inequality of Citizens in Russia: Analysis of the Results of a Sociological Survey

IntroductionInequality is one of the global problems of humanity, so it is no coincidence that its reduction is included in the 17 Sustainable Development Goals enshrined by the UN General Assembly ^[1].

A high level of inequality of citizens is typical for many States. According to the World Economic Forum, inequality in OECD countries is at the highest level in the last half century ^[2].

In Russia, the level of inequality of citizens has remained high for 30 years since the market transformations. The Gini coefficient, as an indicator of inequality, reaches 0.43 in Russia. According to the CIS Statistical Committee, it is significantly lower in most European states and countries of the former USSR. For example, in Belarus – 0.28, Ukraine – 0.26, Kazakhstan – 0.29, in Germany – 0.31, Poland – 0.28, Great Britain - 0.33, France - 0.29, Latvia and Lithuania – 0.36, Estonia – 0.3 ^[3].

Despite all the measures taken by the Government, inequality in Russia cannot be reduced. On March 16, 2022, at a meeting on socio-economic support of the subjects of the Russian Federation, the President emphasized: "even in the current difficult situation, by the end of the year we need to achieve a reduction in poverty and inequality" ^[4]. The Security Council of the Russian Federation also considers the problems of inequality and poverty to be key among the modern socio-economic problems of Russia ^[5].

The hypothesis of the study is that the inequality of citizens in Russia is being transformed, and the existing approaches to its assessment do not allow to objectively determine its current state, which, among other things, leads to the inefficiency of measures taken by the state to smooth it out. Despite the breadth of coverage by domestic science of the problem of inequality of citizens and research on the prospects for overcoming it, researchers currently do not pay enough attention to the transformation of inequality.

The purpose of the study is to assess the manifestations of economic inequality of citizens in Russia based on the results of a sociological survey to determine the directions of smoothing inequality. The research is aimed at obtaining answers to the following questions. How do different categories of economic inequality of citizens relate? What are the features of modern inequality of citizens in Russia? What areas of inequality smoothing can be promising?

Approaches to the definition of inequality and the directions of its smoothing For modern science, the problem of inequality is of significant interest, however, the category of inequality itself is not clearly defined.

Generically, inequality is a division. Inequality of citizens is considered as a form of stratification in which individuals, social groups, strata or classes are at different levels of the vertical hierarchy and have unequal opportunities to meet their material, social or spiritual needs ^[6]

Marxist theory for the first time develops the provisions of the essence of economic inequality. Based on data on the welfare of the working class in England , K. Marx and F. Engels came to the conclusion that the increase in capitalist means of production does not lead to an improvement in the standard of living of the proletariat, but leads to mass impoverishment.^[7]

One of the founders of sociology, M. Weber, complements Marxist theory with the study of inequality factors, where, along with economic factors, he highlights prestige and power, which lead to different classes having different income opportunities. ^[8]The classic work in the study of inequality and economic growth was the work of the Nobel laureate in economics S. Kuznets.

Based on empirical data, he showed that economic growth in the era of industrialization was accompanied by an increase in inequality (until about the 1920s), and then inequality began to decrease with continued economic growth. The decrease in inequality was characterized by a significant increase in real incomes of the population ^[9]. The graphical expression of the dependence of wealth and inequality is a parabola with branches down or an inverted U-shaped curve, called the Kuznets curve. T. Piketty, using broader statistical material, showed that this graph is a horizontal S-shaped curve, since since the 1970s the curve has sharply gone up, that is, the level of inequality began to increase while increasing well-being ^[10].

Income inequality of citizens is often understood as economic or monetary inequality. We believe that this is not quite correct in the framework of scientific research. It is necessary to distinguish these definitions. The following concept can be proposed, presented in Figure 1. Economic inequality is the inequality of the well–being of citizens in a broad sense. It includes inequality of citizens by current income, inequality by accumulated capital or wealth, as well as inequality of consumption. Inequality in accumulated capital or wealth inequality is monetary inequality. The need for a distinction is due to the fact that a rich citizen with capital and property may not have current incomes, as on the contrary, with high current incomes, a rich citizen may not have savings. Inequality of consumption is the most pronounced form, and ultimately, inequality of citizens manifests itself in it.

Figure 1 – Classification of economic inequality

Compiled by the author.

For several decades, the main problem of inequality and poverty of the Russian population lies not in the plane of lack of resources, but in the mechanisms of their distribution and redistribution. This conclusion seems to be very important in conditions when the crisis limits the possibility of further growth of state budget expenditures for social needs, requiring a radical restructuring of distributive relations.

Income taxation can be one of the key instruments of the state's impact on inequality. As a result of empirical studies, it has been proved that the personal income tax in force in Russia from 2001 to 2021 did not smooth out, but on the contrary, increased inequality ^[11]. With the introduction of the progressive personal income tax scale from 2021, the situation has not changed significantly, since the progression is mild. The issues of optimizing income taxation to ensure the smoothing of inequality of citizens in Russia are relevant ^[12]. For example, in this context, simulation modeling methods are promising, which allow us to simultaneously set a number of factors as optimization criteria: reducing inequality along with ensuring the preservation of budget system revenues ^[13].

The reduction of the tax gap (as the difference between the actual tax revenues and the estimated ones that could replenish the budget if all taxpayers comply with tax legislation), including at the regional level, can also contribute to overcoming inequality, in order to increase budget security and increase the potential of public spending. The reduction of the tax gap today implies, first of all, the realization of the tax potential of an unobserved economy ^[14]. In Russia, the taxation of citizens in the set of state financial instruments for influencing inequality is not key, social transfers currently have a greater impact. The subjective assessment of inequality by citizens is also influenced by the share of expenditures on social policy, which is confirmed in empirical studies. For example, for the sub-federal level, it has been proved that in regions characterized by relatively low average incomes of the population and a high level of inequality, social policy through the redistribution of large shares of regional budgets for health, education and social programs reduces the negative impact of inequality on well-being ^[15].

Inequality is not permanent, it is transformed. Its new forms are global inequality, spatial inequality, environmental inequality – inequality in the distribution of environmental benefits, inequality in health ^[16], digital inequality ^{[17, 18, 19]}, inequality in the balance of life and work ^[20], inequality of the coronacrisis ^[21], etc.

Inequality in consumption, as most clearly manifested, has the following trends. According to Rosstat data on the structure of food consumption by citizens in decile groups ^[22], from 2012 to 2020, in general, the difference in the absolute amount of consumption between the richest and poorest citizens decreased. However, this happened at the expense of bread, potatoes, sugar, where the average consumption per year per person was almost equal for the first and tenth decile groups. At the same time, the gap in fruits, fish, milk and dairy products has increased. That is, poor citizens began to consume more food, but at the expense of lower benefits, lower-quality products, while in the diet of the most affluent citizens, within the framework of a healthy lifestyle orientation, with a general reduction in consumption, the share of the highest quality products is growing. Thus, inequality in food consumption is shifting from quantitative to qualitative.

Such inequality trends remain outside the scope of observations and averages. These are mostly qualitative changes. The economic factors underlying the "classical" idea of the inequality of citizens are increasingly moving into the second and more distant plan, giving way to non-economic factors that determine not so much the quantifiable standard of living, as a kind of integral satisfaction with it. ^[21]

New manifestations of economic inequality require the development of new approaches to fixing inequality, which is a new challenge for economic science and domestic statistics. Without changing approaches to measuring inequality in the future, we will not be able to obtain an objective assessment of its dynamics, which means we will not be able to develop effective measures to smooth it out. The solution may be a double assessment of indicators – in kind and in value terms, as well as taking into account quality indicators, where possible. However, in order to determine possible indicators, it is important today to determine the spectrum of trends in changing inequality, including with the help of sociological surveys.

Methodological and information base of the studyThe sociological study was conducted on the basis of a sociological survey in June-July 2022.

As a result of a continuous survey, 1,063 respondents from 45 regions of Russia were interviewed. The survey was conducted indirectly using Google Forms on 20 questions on demographic characteristics, the level of well-being of citizens, their consumer preferences, marital status, financial aspects (ownership, availability of capital, availability of loans, investment activity and the application of tax deductions).

The survey was attended by 70% of women and 30% of men, 89% of urban residents and 11% of rural residents, 19% of citizens with secondary education and 81% with higher education, including 10% with an academic degree, 49% married and 51% single.

The age structure of the respondents: under 25 years – 25%, 25-35 years – 37%, 35-45 years – 18%, 45-55 years – 11%, 55-65 years - 7%, over 65 years – 2%.

The status of the respondents is very diverse: working – 65%, working students – 11%, students - 9%, entrepreneurs – 4%, working pensioners, unemployed and pensioners – 3% each.

According to the number of minor children and dependent persons, the sample is characterized as follows: none – 61%, 1 – 21%, 2- 15%, 3 and more – 3%.

The survey involved respondents from 45 regions. The majority are from the Yaroslavl region – 72%, 771 people. In addition, Moscow – 6%, 59 people, Moscow region – 4%, 47 people, St. Petersburg - 3%, 30 people, Vologda region – 3%, 28 people, Komi Republic – 2%, 16 people, Kostroma region – 1%, 10 people, in the rest – less than 10 people ^[23]

Taking into account the above factors, the sample can be considered representative of the objectives of the study. The limitations of representativeness are the predominance of the urban population over the rural, residents of the Yaroslavl region over the rest of the regions, young people over the elderly, men over women. It is also a limitation to conduct a survey via the Internet, since this narrows the sample in part of citizens who do not have access to the Internet. These limitations are taken into account when forming conclusions based on the results of the study by means of factor analysis of the studied trends.

Conclusions about the manifestation and factors of inequality are formed based on a comparison of groupings by portrait and factor characteristics of inequality with the distribution of respondents by the level of average monthly personal income. The average monthly personal income is determined by the respondents independently in aggregate from all sources: wages, pensions, benefits, income from entrepreneurial activity, securities and financial instruments, rent, etc.

Among the specific economic research methods in this paper, statistical and factor analysis are used to process the results and form conclusions.

Results. Modern characteristics and transformation of inequality of citizens in RussiaAccording to the range of the level of average monthly personal income, the sample of respondents follows a normal distribution.

So, 11% of respondents have incomes up to 15 thousand rubles, that is, below the minimum wage and the subsistence minimum, and from 100 to 400 thousand rubles. 40% of respondents have an income of 15 to 40 thousand rubles, that is, below the level of the average per capita monetary income of the population in the country (40.04 thousand rubles per month for 2021 ^[24]), 37% - from 40 to 100 thousand rubles, that is, above average. 1% of respondents (11 people) answered that they have incomes over 400 thousand rubles, the potential income of these citizens falls under the increased personal income tax rate of 15%. Graphically, the sample structure by the level of the respondents' average monthly personal income is shown in Figure 2.

Figure 2 – The level of the respondents' average monthly personal income

Compiled by the author.

The formation of Porter income groups allowed us to identify individual manifestations, features and factors of inequality based on the results of the analysis of survey data, which include the following.

1. Poverty and wealth of youth. Among respondents with incomes below the minimum wage, the largest share – 71.4% - is under 25 years old, and from 15 to 40 thousand rubles – 30.9%, although their share in the total sample is 25.3%. In total, 80% of respondents in the under-25 age group have incomes below average. At the same time, respondents aged 25-35 are the most affluent. They make up 46.4% of respondents with incomes from 40 to 100 thousand rubles, 45.1% - from 100 to 400 thousand rubles, 63.6% - over 400 thousand rubles per month.

There are two opposite trends for young citizens – poverty under the age of 25 and a sharp increase in the level of well-being from 25 to 35 years, since this age category has the highest incomes in the sample. This is due to the fact that today citizens under the age of 25 continue to receive education, without which they remain unclaimed in the labor market, and after receiving education and starting a career they have a significant increase in income levels, because they have more employment opportunities, and employers are ready to invest more in young and promising employees.

2. Gender income inequality. The share of men with high incomes significantly exceeds the share of women and amounts to 53.3% for incomes from 100 to 400 thousand rubles, 72.7% for over 400 thousand rubles, while the share of men in the total sample is 30.3%. On the contrary, among respondents with incomes below average, the proportion of women was 79.6%, while the proportion of women in the total sample was 69.7%. It is obvious that, in general, women's incomes are lower than men's incomes, which is traditional.

3. Income inequality of citizens by level of education. Among respondents with incomes above average (over 40 thousand rubles), the share of those with secondary education was 4.6%. Their share in the total sample was 19.2%. Accordingly, people with higher education have a higher income level.

4. Poverty of rural citizens. Among respondents with incomes below average, the share of rural citizens for incomes up to 15 thousand rubles was 16.8%, from 15 to 40 thousand rubles – 18.1%, and the share of rural citizens in the total sample was 11.5%. The proportion of urban residents is greater in incomes above average: with incomes from 40 to 100 thousand rubles – 93.6%, from 100 to 400 thousand rubles – 99.2%, over 400 thousand rubles – 100% with their share in the total sample – 88.5%. The incomes of rural citizens are less than the incomes of citizens. This is traditional for Russia, and is one of the factors of the reduction of the rural population. It is important to take into account that, as a rule, rural residents have additional benefits from running a personal subsidiary farm, which to some extent is able to smooth out the difference in their income compared to urban residents. 

5. Income inequality of citizens in the regional context. An assessment was carried out for 4 regions where the largest number of respondents were attracted – Yaroslavl region, Moscow, Moscow Region and St. Petersburg. It was found that in the two capitals and the Moscow region, the share of citizens with high incomes is higher. Half of all respondents with incomes over 100 thousand rubles live in these three subjects of the Russian Federation (66 out of 133 people). This indicates a link between regional inequality and inequality of citizens.

6. Marital status and the number of minor children and dependent persons in general do not have a significant impact on income inequality. This conclusion is formulated taking into account the exclusion of respondents under 25 years of age from the samples on both grounds. However, among women over 25 years of age with incomes from 100 to 400 thousand rubles, the share of unmarried women is higher – 51%, with their total share in the sample 37.9%. In addition, among women over 25 years of age with incomes from 100 to 400 thousand rubles, the proportion of childless is 58.5% higher than in the whole sample – 47.4%. At the same time, among women over 25 years of age with incomes below the minimum wage, the proportion of women with children is 60.7%, while the proportion of their sample as a whole is 52.6%. Taken together, this indicates that the incomes of childless and unmarried women are generally higher than the incomes of married women and women with children. Thus, having children and getting married for women can be a factor of poverty.

7. Income inequality of citizens depending on their status. Among respondents with incomes below average (up to 40 thousand rubles), the share of students was 17%, unemployed students – 15.4%, unemployed – 5.2% with a share in the total sample of 9.2%, 10.8% and 3.2%, respectively. Among respondents with incomes over 100 thousand rubles, the share of employees was 76.7%, entrepreneurs – 12%, with their share in the total sample of 64.4% and 3.6%, respectively. Taken together, this indicates the poverty of the unemployed and students, as well as the fact that the majority of citizens with high incomes are workers and entrepreneurs (in total 88.7%).

Of interest is the subjective perception of the level of income by respondents from the standpoint of its sufficiency. In a generalized form, this ratio is schematically presented in Table 1.

Table 1 – Ratio of income level and subjective assessment of its sufficiency by respondents

In general, the perception of income sufficiency corresponds to its level: with the growth of income, the assessment of its sufficiency increases both for the purchase of food and for making large purchases and investments. For example, the largest proportion of citizens who do not have enough income to purchase food – 20% - in the group of respondents with incomes below the minimum wage (up to 15 thousand rubles). Incomes from 15 to 40 thousand rubles, from 40 to 100 thousand rubles and from 100 to 400 thousand rubles are mostly enough for current expenses, but savings are needed to make large purchases – 65%, 89% and 75%, respectively. The income is enough to make large purchases and investments, mainly for respondents who receive from 100 to 400 thousand rubles and over 400 thousand rubles – 25% and 73%, respectively. Detailed data on the ratio of the income level and the subjective assessment of its sufficiency by respondents are presented in Figure 3.

Figure 3 – The ratio of the income level and the subjective assessment of its sufficiency by respondents

Compiled by the author.

It is important that the majority of respondents (71%) assess their income as sufficient for current expenses with the need to attract savings to make large purchases. Broken down by income level, such a majority has developed for all groups except the extreme ones. Citizens mostly limit their current needs to the level of income, adjusting to it and planning large purchases in advance with the formation of necessary savings. Taking into account the fact that the range of income in the specified aggregate from 15 to 400 thousand rubles differs by 26 times, this confirms the subjectivity of the perception of income sufficiency with different needs.

The evaluation of the ratios of the grouping of the sample by the level of the average monthly personal income of respondents with the grouping of the sample by the assessment of income sufficiency allowed us to establish the following. Despite the correspondence of the respondents' assessment of income sufficiency to its actual level, inequality in the subjective assessment of income sufficiency is significantly weaker than inequality in actual income. Only the most significant characteristics of inequality are expressed: poverty and wealth of young people, inequality in the regional context, poverty of large citizens. For example, among respondents whose income is not enough even to purchase food, the share of citizens under 25 is 42.1%, while their share in the sample with incomes below the minimum wage is 71.4% with a share of 25.3% in the total sample. That is, poverty also manifests itself in a subjective assessment, but less vividly than in terms of the actual level of income. This indicates that citizens in Russia feel income inequality is weaker than it actually is. This is also why such a high level of inequality of citizens does not lead to the realization of the existing threat to socio-economic stability.

To assess wealth inequality, respondents were asked to answer the question "What do you own?" with the possibility of choosing several answer options: a car, real estate for their own residence, real estate for rent, capital / savings, none of the above. The survey results are shown in Figure 5. The majority of respondents (75%) own a car or real estate for their own residence, including real estate for their own residence – 65%, a car – 42%. 27.8% of respondents have savings, and 8.4% - real estate for rent. 14.5% of respondents do not have any of the listed property.

Figure 4 – Respondents' ownership of property

Compiled by the author.

In the framework of the study, we did not evaluate the cost parameters of the property, but nevertheless, the presented grouping indicates that the inequality of accumulated wealth is quite large. In addition, according to the survey, the ratio of income inequality and wealth inequality indicates that these are largely similar, but still different manifestations of inequality. Thus, capital and savings are fairly evenly distributed in the context of income groups: both in the group with incomes below the minimum wage (25%), and with incomes from 15 to 40 thousand rubles (20%), from 40 to 100 thousand rubles (31%). For groups of citizens with incomes above average, the share of those with a car or real estate for their own residence is in the same range: from 40 to 100 thousand rubles (84%), from 100 to 400 thousand rubles (88%), over 400 thousand rubles (91%).

In terms of demography, wealth inequality is not as pronounced as income inequality. Only key trends are expressed, for example, low well-being of young people or capital inequality in the regions. Among those who have real estate for rent, the share of residents of the two capitals and the Moscow region is 48.5%, capital or savings is 28.4% with their share in the total sample of 15%.

Thus, the results of the sociological survey illustrated that the inequality of income, consumption and wealth of citizens manifest themselves in different ways. Income inequality is more pronounced than its sufficiency for current consumption according to a subjective assessment, or wealth inequality.

DiscussionInequality is not static, it is transformed.

New forms are emerging, such as digital inequality, inequality in the balance of life and work, etc., it finds new manifestations, for example, inequality in access to education, healthcare, the Internet and digital services. The gaps in food consumption between rich and poor are narrowing, but the structure of consumption is changing. The least well-off citizens acquire larger volumes than before, but less high-quality goods.

Income inequality of citizens continues to be a key factor in the manifestation of new forms of inequality. This is confirmed by the results of sociological research: income inequality is the most painful for modern Russian society and for households (84% and 69% of the surveyed citizens), while income inequality is perceived more acutely over time. ^[25]

In the conditions of transformation of inequality of citizens in Russia, it is necessary to implement a set of measures of state influence on the factors of its occurrence. In terms of poverty reduction, these are, first of all, such areas as support for working youth, novice specialists, rural areas, attracting investments in promising rural settlements, increasing pension provision, support for motherhood and childhood, regional alignment and redistribution of resources due to the formation of a favorable investment climate in the regions.

In many ways, similar measures of socio-economic policy are already being implemented in Russia today, however, in the absence of poverty reduction and reduction of inequality, we consider their further improvement and deepening necessary. Prospects from these positions may have the following tools.

1. Distribution of surcharges to young specialists to enterprises and organizations of all industries.

2. Expansion of rural development programs, such as "Zemsky Doctor", "Zemsky Teacher", the State Program for the Development of Agriculture and regulation of agricultural Products, raw materials and Food markets (Decree of the Government of the Russian Federation No. 717 of 14.07.2012 (as amended on 28.05.2020)).

3. Stimulating investment activity in promising rural settlements through the creation of advanced agro-industrial enterprises of the processing industry.

4. Further outstripping the increase in state pension provision and stimulating the development of non-state and corporate pension provision through tax benefits.

5. Continuation of the maternity capital program.

6. Development of a system of providing part-time employment opportunities for young mothers at the state level.

7. Increasing the targeting of social support for families with children by analogy with the introduction of need criteria for benefits for children from 3 to 7 years (Decree of the President of the Russian Federation of 10.03.2021 No. 140 "On some issues related to the implementation of monthly cash payments provided for by Decree of the President of the Russian Federation of March 20, 2020 No. 199 "On additional measures state support for families with children").

In terms of the withdrawal of excess incomes of the wealthiest citizens, that is, leveling the so-called "spire", tax instruments seem promising to smooth out inequality. Within the framework of the developed classification of economic inequality (Figure 1), the complex of tax effects on it involves measures in the field of income taxation (to smooth out current income inequality), property taxation (monetary inequality) and indirect (consumption inequality).The potential of taxation in smoothing inequality in Russia has not been realized.

Promising tools here may be, for example, strengthening the progression of personal income tax, especially for super-incomes, the introduction of a tax-free minimum for personal income tax, the introduction of progressive rates on personal property tax, the introduction of an independent inheritance and gift tax (abolished since 2006), the introduction of a "luxury" tax for personal property tax by analogy with a transport tax, as well as an increase in tax rates for owners of many real estate objects, an increase in VAT and excise rates for expensive "luxury" goods.

The initial hypothesis of the study has been confirmed. The absence of markers and statistical indicators to assess the transformation of inequality leads to an incomplete definition of inequality and the ineffectiveness of measures taken by the state to smooth it.

The scientific novelty of the study consists in interpreting the results of a sociological survey in terms of identifying the key manifestations of modern economic inequality and outlining the portrait of the least and most affluent citizens.

Conclusion The conducted research allowed us to formulate the following conclusions.

1. Inequality is one of the global problems of mankind. Russia has been unable to overcome the high level of inequality for 30 years since the implementation of market reforms and privatization.

2. Modern science has not formed a unified approach to the category of inequality. A variant of the classification of economic inequality is proposed. Economic inequality is the inequality of the well–being of citizens in a broad sense. It includes inequality of citizens by current income, inequality by accumulated capital or wealth, as well as inequality of consumption. Inequality in accumulated capital or wealth inequality is monetary inequality.

3. Currently, the inequality of citizens is being transformed: new forms of it appear (in access to quality education and medicine, the Internet, mobile communications, etc.), qualitative differences between the level of the most and least affluent citizens are becoming more pronounced, while reducing the gap in consumption volumes in kind. The transformation of citizens' inequality remains beyond the scope of statistical observations and averages. Without changing approaches to measuring inequality, an objective assessment of its dynamics is impossible, and hence the development of effective measures to smooth it out.

4. According to the results of the sociological survey, one can note among the key manifestations and factors of economic inequality in Russia: poverty of young people under 25, poverty of rural residents, poverty of students, poverty of unemployed pensioners and the unemployed, income inequality of citizens in the regional context. These manifestations make it possible to form the portrait features of the most and least affluent citizens in Russia.

5. The perception of sufficiency of income by citizens corresponds to its level. The majority of respondents (71%) assess their income as sufficient for current expenses with the need to attract savings to make large purchases. Despite this, inequality in the subjective assessment of income sufficiency is significantly weaker than inequality in actual income.

6. In order to effectively smooth out the economic inequality of citizens in the conditions of its transformation, a set of socio-economic measures is needed to neutralize the identified key factors of its occurrence.

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