Gini coefficient, a standard measure of inequality in the
distribution of total money income of the population, increased to
0.4 at the start of this decade compared to 0.26 at the start of
market reforms. The gap between the average income of the lowest and
highest fifth parts (quintiles) of the population, which was only
2.6 in 1991, jumped to 13.8 ten years later. Inequality growth in
Russia has been among the fastest in the world.
Rising inequality is a worldwide phenomenon accentuated by economic
globalisation. Russia’s case is particularly noticeable because it
combines the effects of a change from a socialist to a capitalist
type of economy with those of rapid integration into world markets.
1990, under communism, non-labour income accounted for only 8.9
percent of total personal income while in 2000 its share rose to
24.2 percent. These figures do not tell the whole story because
incomes of the entrepreneurial class, corrupted bureaucrats, and
organised crime are underreported to the extent of 20 percent of
Globalisation adds to inequality in more than one way. A direct
negative influence is seen in the trend of consumer prices to
gravitate towards the much higher level of imported goods while
wages lag far behind due to the system of low medical, educational
and housing costs partly retained from socialism. As a result, real
wages, even though they recovered from all time low of 44 percent in
1998 compared to their 1990 level, were still only 51 percent as
high in 2001, or about half of their pre-reform value.