30 October 2011

Surprising Insights about Hard Times in Russia and America


robrush54 from Photobucket

When people look at current economic statistics, whether about the USA, Russia, or Greece, often they feel that things have gone wrong when it comes to fairness.

I view talk by the conservatives about austerity as a big lie meant to continue manipulating people to cave before the powerful.  Maybe this is why the Occupy Wall Street Movement has sprung up.

The Russian people have continuing economic problems, even though real income has multiplied since 2000.  Most pay no mortgage or rent, a legacy from the end of the Soviet Union, and don’t need a car for work.  But the consumer economy in the USA is crumbling, dramatically going from good to bad. 

Numbeo.com compares the USA to Russia

Consumer Prices 23% higher

Rent Prices 52% higher

Restaurant Prices 2% lower

Groceries Prices 51% higher

Local Purchasing Power 170% higher

More information on economic fairness,,,  These numbers indicate the US has a large disparity of income and is less mobile than much of Europe.

Russia has a better GINI income distribution than the USA, 42.3 to 45. Actually, the Russia number is better than its face value. Russia Now hot link

Economic mobility... USA 1.0  Russia? Denmark 3.2   No Russia number available, but I guess it’s significantly better than the USA. Economic Mobility Project hot link

Both countries have serious problems...

  • chaotic medical delivery
  • unresponsive government
  • corruption

Trouble in the Land of Plenty...

Americans have 170% higher purchasing power but they have to deal with outrageous medical costs, along with  other high costs, such as public and private transportation.  They have an advantage in that they can exercise some democratic rights, but these days the US government seems unable to help its citizens effectively.

Many Americans in real terms are poorer than years ago...    Unemployment is now 9.1%  The recent trade bill will likely result in a further net loss of jobs. Christian Science Monitor hot link

Most of the poor have appliances, cars, electronics which most Americans think essential, live in larger spaces than many middle income Europeans. But still they feel down and out as they are hard pressed to cover their expenses and often compare themselves to those more well off.

20 years after the Soviet Union...

Even with all their troubles, Russians don’t have a stress-disaster mentality but rather are extraordinarily stoic (maybe masochistic?).  Economic survival has always been difficult here, and people are not surprised or very upset by a downturnRussian hard times hot link  Unemployment is at 7.6% (2010). 

The situation for the very poor in Russia is much harder than anything America has recently experienced.  There is a scant welfare system, small and scattered unemployment benefits, and the average  pension is around 8,500 rubles ($328) a month.  Food Stamps and Meals on Wheels are not available, except for the wonderful initiatives of the JDC for Russian Jews.

You are poor in the USA if your family of four makes $22,350 or less.  In Russia people who can not afford the hypothetical (and too low) Subsistence Food Basket are considered poor..  a yearly $2,013 for pensioners  and $10,425 for two parents and two children. 14.9% of Russians are statistically poor.

The Consumer Price Index...  General and Food Inflation

Inflation in Russia is now around 8.1%, while in America it is close to 3.9%.   The Russian food basket increased in cost 20 – 30% recently, and 15% in 2010.  American food costs rose 3.5 to 4% in 2011.

How would Americans react if their grocery bills went up 35% in less than two years?

Food in Russia takes somewhere between a third and two thirds of income, while the average American spends 9% on food... (but gradually a larger share as you look from the poor to the poorest... 37% of income on food in 2009). Business Insider hot link 

Russian Medical Benefits...

It’s easier to get approved for disability payments in Russia but the benefit payments are very low.

100% of hospitalization and clinic doctors costs are covered with no deductible or co-payment. But the trend has been towards individuals having to pay for specialists. 

Surgery and drugs are only covered in exceptional circumstances.  Drugs are still much cheaper than in the United States.

Pharmacy bills...

Russian pharmacies sell packages of bubble wrapped drugs which rarely require a prescription, with no onsite pharmacist, just a scurrying clerk or two.  This cuts down on costs, but no one checks for contraindications.  Without this protection, I study the internet pharmacy sites to find out more.

Americans are charged outrageous prices for prescriptions.  The NJ Prescription Drug Price Registry, shows some of the best prices available.  In Flemington the best pharmacy price was $143 for 90 tablets 2.5 mg Warfarin.  Here in Russia the current price is an equivalent $4.99 for 100 pills... 28.6 times cheaper, and with 10 extra pills!  NJ Drug Price Registry hot link

Our monthly costs...

Besides some rather crass New Russians, most people have  fewer expensive wishes than more acquisitive Americans.  Cars are a luxury as we have extensive public transportation.  Russians are less wasteful of food.

We get by with frugal living.  We watch the rubles but spend when necessary, as for medical drugs or even an occasional taxi ride (no car expenses for us since our arrival).  We spend around 10,000 rubles ($328) to 12,000 rubles($393) monthly for grocery items and 5000 rubles($164) for medicines.

There are monthly bills for cable internet, electricity, hot and cold water, apartment fees, and we pay for medical treatment and tests at times, too.  Typically we have no charge cards, other debt, or loans to pay.  We are in our late 60s, our wishes are less but our medical needs can cost more than we feel comfortable paying. 

Money isn’t everything...

Economic life can be tough whether you live in Russia or the United States.  I hope you are getting by, or better, prospering.  Remember while money is essential, it should not be confused as the most important part of a happy life.

Comments very welcome!


No comments:

Post a Comment

Comments, Questions, Ideas