Untitled Document On April 9, 2003, the Carnegie Endowment for International Peace hosted a presentation by Tatyana Maleva on "The Russian Middle Class." Maleva, Director of the Independent Institute of Social Policy in Moscow, discussed the findings of her recent research, which is based on surveys of over 4000 households in twelve Russian regions. Anders Aslund, Senior Associate at the Carnegie Endowment, moderated the session.

Tatyana Maleva opened her presentation by noting that her research is partly a response to discussions that took place two years ago at a Carnegie conference entitled "Russia-Ten Years After." A straw poll conducted at that meeting revealed that only 30% of the attendees believed that a middle class existed in Russia, and that it had the potential to succeed. She added that her desire to evaluate the success of Russia's transition also contributed to her interest in the middle class; the presence of a strong and growing middle class would mean that after years of upheaval, reform has finally worked. Studying the middle class in Russia presents the researcher with several challenges, however. First and foremost among these is the question of how to define the group. This problem does not exist in stable countries with healthy economies, where the sociological definition of the middle class-those who are educated, hold stable jobs, and enjoy a strong position on the labor market-tends to overlap with other indicators of social status, including wealth and self-identification. In Russia, however, Maleva had to work with three discrete indicators: wealth, occupation, and self-identification.

In Maleva's survey, 21.9% of respondents could be classified as middle class by virtue of their occupation, and 21.2% by virtue of their wealth. 39.5% of participants identified themselves as "middle class." Only 7% of those surveyed are classified as middle class in all three categories, a group which Maleva refers to as the "core middle class." Nearly twice as many respondents-12.2%-are considered middle class according to two categories. In total, then, Maleva classifies about 20% of the Russian population (those who fit two or three of her criteria) as middle-class. Her survey sampling is intended to be representative of the entire country, but she noted that the proportion of middle-class citizens in urban areas is substantially higher than 20%; in Moscow and St. Petersburg, 13% of the population is included in the core middle class.

Maleva then proceeded to discuss whether the fact that one-fifth of Russians are considered middle class should be cause for celebration or concern. At the very least, she argued, her study disproves two major myths about the Russian middle class: that it doesn't exist; and that the majority of Russians are sociologically "middling." Her research also illuminates some troubling facts. It shows that only one-third of the well educated have learned to make money, and that only one-third of the wealthy are well educated. Oddly enough, it also reveals that wealth does not necessarily ensure a high self-ranking. On the other hand, Maleva's data indicates that Russians are more optimistic than might be expected; although only 20% are classified as "middling," twice that number consider themselves to be middle class.

Next, Maleva discussed the activities of the emerging Russian middle class, which can be classified as both traditional and innovative. The most striking feature of this class, she argued, is its stability and its ability to adapt to changing political and economic situations, but a number of other characteristics of the middle class emerge when this group is compared to other social groups. The incomes of middle class citizens are two times higher than that of other Russians, and they are three times more likely to have savings (which tend to be held in banks rather than in cash). Their long-term financial planning tends to focus on accumulating personal savings rather than relying on state subsidies. They have a high level of economic activity; 76% of the middle class is regularly employed, compared to just 47% of those who fall below the thresholds established by Maleva. Additionally, the middle class is far more likely than the general public to be involved in small business ventures and to have secondary employment. Maleva noted that her data disproves two other myths about the middle class: that it derives from the shadow economy, and that it seeks to legitimize its status. There seems to be no common origin of the middle class, and once Russians attain this social position, they are no more likely than the general public to be politically active or to participate in civic initiatives.

Maleva concluded her presentation by imploring the meeting attendees, "don't worry about the Russian middle class." It has managed to weather the changes of the 1990s and the 1998 currency crisis, and it seems to have adequate economic and social resources for its further development. However, the Russian government and international community should be worried about the vast majority of the Russian population that is not part of the middle class, particularly the 10.8% of citizens living far below the poverty line. Considering its poor education and the continuing weakness of the Russian economy, this group has few prospects for social mobility in the coming years. It also remains to be seen what will happen to the 70.2% of the population whose social status falls below that of the middle class but above that of the destitute. Maleva insists that segments of this group do have some chance of joining the ranks of the middle class, and noted that their fate will likely serve as an indicator of the health of Russian capitalism-and the future of the Russian middle class.

The question and answer session opened with further discussion of Maleva's methodology and definition of the middle class. Maleva noted that her survey did not find a distinct upper class; she considers the proportion of Russians whose social status falls above that of the middle class-about .1%-statistically insignificant. She acknowledged that the Russian middle class differs from similar groups in other countries by virtue of the fact that it is located at the top of the social pyramid and values stability over social engagement or political activism. Still, she argued, its vitality and strength distinguish it from other segments of Russian society. Maleva added that with regard to wealth, she defined the middle class as those with income of at least $200 per capita per month, though this threshold was lower ($110) in Tomsk. In response to questions about the demographic makeup of the middle class, she also noted that it is considerably younger than the population at large, with an average age of 30-40 years.

Another attendee asked Maleva which of her discoveries most surprised her. She responded that in spite of the importance that is assigned to education in Russia, she found that only about 22% of respondents are well educated. Maleva pointed out that of these, the majority have a Soviet education, which cannot readily be applied to the new challenges posed by the post-Soviet labor market. The slow growth of the middle class-according to Maleva's data, this group has not expanded at all in the last four years-may in part be a result of structural deficiencies in the Russian education sector. Maleva argued that this emphasizes the need for comprehensive reform of the education system. Anders Aslund added that while institutional reforms would be a positive development, economic growth would do the most to help resolve these problems.

Other questions centered around the role of professionals and public-sector employees in the Russian middle class. In contrast to Soviet times, when teachers served as the backbone of "middling society," only 50% of those comprising Maleva's core are employed by the educational sector. The impoverishment of small-town educators has further reduced teachers' share in the middle class; the majority of educators identified as middle class reside in Moscow or St. Petersburg. Overall, though, Maleva did not find a strong correlation between respondents' type of employment and their likelihood of being considered middle class: the portion of the middle class employed in any particular sector tended to correspond to its general share of the population. The one exception to this rule is small business, which is disproportionately staffed by the middle class.

Anders Aslund closed the meeting by noting that the small size of the core of the Russian middle class is disturbing, as is the apparent disjuncture between level of education and wealth. On the other hand, he noted with optimism that many more Russians consider themselves to be part of the middle class than actually belong to it. Although the development of the middle class has been halting, he pointed out, no part of Maleva's findings indicate that this important social group will not grow and flourish in the future.

Summary prepared by Faith Hillis, Junior Fellow with the Russian and Eurasian Program at the Carnegie Endowment.