The Economy is Shrinking While Officials’ Salaries are Growing

The number of civil servants at the regional level amounted to 715,300 persons, while that of municipal officials, to 328,400 which does not differ much fr om the 2013 annual indices – 715,000 persons and 329,000, respectively.

With federal officials of federal authorities (the administration of the President of the Russian Federation, offices of authorized representatives of the President of the Russian Federation (at the regional level) ) taken into account, the total number of civil servants amounted to 1,091m persons^[1].

In Q1 2014, the average monthly pay of civil servants amounted to Rb 32,100 (109.0% against Q1 2013), while that of municipal officials, to Rb33,400 (109.6% against Q1 2013).

In Q1 2014, the level of average monthly accrual of wages and salaries to civil servants of executive authorities of constituent entities of the Russian Federation was 80% higher than that of civil servants of local agencies of federal executive authorities. The ratio of the average monthly accrual of wages and salaries of civil servants of executive authorities of constituent entities of the Russian Federation to that of civil servants of local agencies of federal executive authorities varied from 109.3%–119.1% (in 7 constituent entities of the Russian Federation) to 150%-300% (in 9 constituent entities of the Russian Federation).

The leader as regards the level of remuneration of officials of local governments are the Ural Federal District wh ere the average monthly pay amounted to Rb 57,490 which exceeded by 73% the average monthly nationwide pay of civil servants of local governments. Actually, such a high index was ensured by high wages and salaries of officials in the Yamal-Nenets Autonomous Regiona and the Khanty-Mansisk Autonomous Region: Rb 120,000 and Rb 113,600, respectively. For comparison: officials of local governments in Moscow, the Moscow Region and St Petersburg are paid on average Rb 63,700, Rb 49,000 and Rb 46,900, respectively.

Apart from constituent entities of the Urals Federal District, decent wages and salaries are paid to local government officials of the Nenets Autonomous District (Rb 102,400), the Tyumen Region (Rb 95,100) and the Kamchatka Territory (Rb 70,630).

The minimum wages and salaries of local government officials are observed in the Pskov Region (Rb 15,300), the Chechen Republic (Rb 15,800), the Republic of Karachevo-Cherkessia (Rb 17,500), the Tambov Region (Rb 19,230) and the Smolensk Region (Rb 20,300).

In terms of dynamics, the wages and salaries of municipal officials increased on average in Russia by 9% on the level of Q1 2013. The maximum growth was observed in the Magadan Region (45% on the level of 2013), the Republic of Mordovia (42%) and the Chukot Autonomous Region (43%).

In some constituent entities, municipal officials’ wages and salaries were reduced as compared to the same period of the previous year. So, wages and salaries decreased somewhat in Ingushetia (0.2%), the Chechen Republic (2.1%) and the Saratov Region (1.1%).

Such high wages and salaries of officials of constituent entities of the Ural Federal District can be explained by the specialization of the region. So, the Khanty-Mansisk Autonomous Region-Yugra and the Yamal-Nenets Autonomous Region ensure a larger portion of production of oil (64 %) and gas (91 %) in Russia. It is to be noted that wages and salaries of local officials differ a little from average nominal accrued wages and salaries in the economy: in the Khanty-Mansisk Autonomous Region, the Yamal-Nenets Autonomous Region and the Tyumen Region their salaries are 54.6% (Rb 50,400), 33.4% (Rb 67,500) and 50% lower (Rb 48,380), respectively.

It is to be noted that a consistent pattern is observed that the difference in wages and salaries of officials and workers engaged in other types of economic activities is becoming lower as officials’ salaries decrease. So, in the Smolensk Region the average pay of those gainfully engaged in the economy amounts to Rb 19,900 which is only 1% lower than the average remuneration of officials.

In the Chechen Republic, the average pay of those gainfully engaged in the economy exceeds by 25% the average remuneration of officials and amounts to Rb 21,000.

Generally, despite an economic slump (it is to be reminded that according to the forecast of the Ministry of Finance by the end of the year economic growth of the mere 0.5% of GDP is expected in Russia which situation inevitably affects the level of the budget deficit) reduction or slowdown of growth rates of officials’ wages and salaries is not observed. At the same time, limitation of indexation of officials’ remuneration can be regarded as a preventive measure aimed at reduction of expenditures of the consolidated budget in conditions of economic stagnation in Russia.

Yekaterina Pospelova, Senior Researcher of the Economic Development Department

^[1] The figure excludes workers filling state (municipal) offices, offices of another type of the federal state service (officials holding special ranks) and offices which are not positions of the state (municipal) service and personnel which carries out functions of protection and maintenance of buildings.