19.07 Polls Review

Positive stratification: Russians' economic optimism continues to grow, alongside concerns and frustrations about their future and security


Russians' assessments of their current financial situation grew steadily in the first half of 2024, reaching their highest levels for the entire period of observations, according to data sets from both the Levada Centre and FOM.

The proportions of Russians stating that their material situation has worsened and those stating it has improved have equalised, whereas over the past 15 years on average, the size of the first group was three times that of the second.

In the subjective self-assessment of those surveyed, the low-income group declined from 35% in the pre-war months to 27% in the first half of 2024, while the high-income group increased from 14% to 18%.

To some extent, such dynamics are based on real grounds: such high rates of income and salary growth in the Russian economy were previously observed only in 2006-2008. However, the economic nature of this growth in the current episode differs significantly from the previous one, making an income correction in the future more likely.

At the same time, surveys may also reflect a certain factor of ‘optimism inflation’ under conditions of widespread censorship and propaganda pressure. This is indicated, in particular, by more nuanced surveys that reveal social frustrations characteristic not only of low-income groups (which is usual) but also of high-income groups, related to the lack of a sense of long-term stability and low levels of social satisfaction.

Russians' assessments of their current financial situation in mass surveys not only show positive dynamics, but have reached their highest levels for the entire history of observations. Thus, the modified social sentiment index from the Levada Centre (the construction of the index and the methodology of its modification are described in the note to the chart below) has surpassed the peaks of the summer of 2008.

Levada Centre modified social attitudes index and family index, 2006-2024

However, notable are the peculiarities of the behaviour of this index after the start of the war. In the spring of 2022, when the Russian economy was experiencing a short-term crisis, the index did not reflect this. The family situation subindex remained relatively stable, but the Russia subindex and expectations subindex sharply went up, leading to a significant increase in the overall index in the summer of 2022. We do not see a sharp decline in all indices (including the family material situation index, which collapsed by 31 points) until September 2022, and this is due to the shock of the announcement of mobilisation. Essentially, this means that the social sentiment index did not reflect the real economic deterioration from March to July 2022, but reacted to a political shock that did not actually impact the current economic situation of households. Even after the exclusion of the power sub-index, the Levada Centre's social sentiment index remains highly dependent on political assessments.

Similar indicators from the Public Opinion Foundation (FOM) also demonstrate their highest levels. The FOM indices, based on responses to questions about changes in financial situation over the past 12 months and expectations of changes in the near future, show more adequate reactions to the shocks of 2022: a sharp drop in the expectations index and then in the index of current assessments after the start of the war and a repeated drop in the expectations index in September 2022, after the start of mobilisation. Meanwhile, two growth periods of the index – at the beginning of 2023 and early 2024 – also brought it to absolute highs. Such high index values were achieved because, for the first time in 15 years, the groups whose material situation improved and those whose material situation worsened were equal, and the share of the first group increased from the usual 10-12% to more than 20%. On average, over 15 years, its size was three times smaller than the group declaring their material situation had worsened.

Social sentiment indices based on FOM data, 2009-2024

Ratio of groups whose financial situation has worsened and improved, FOM, 2009-2024

Positive dynamics have also manifested in the distribution of groups according to subjective assessment of family income have changed significantly. The low-income group ('not enough money even for food' + 'enough money for food but not for clothing') has shrunk from 35% in the pre-war period (September 2021 — January 2022) to 27% in January — June 2024, while the high-income group ('enough money for everything except an apartment or house' + 'no material difficulties experienced') has grown from 14% in the pre-war period to 18% in the first half of 2024.

It should be noted that there are quite specific economic prerequisites for such social optimism. As can be seen in the following graph, the previous episode of such rapid growth in real wages and real incomes was observed in the economy in 2007-2008. However, unlike that episode, today's income and wage growth is not associated with a broad economic upturn but with the intensive growth of specific sectors stimulated by increased government spending and the redistribution of resources from employers to employees due to a severe labour market shortage (→ Andrei Yakovlev: From adaptation to mobilisation). In our view, this situation makes it very likely that incomes will correct downward in the future when budget expenditures are reduced.

Dynamics of real wages and real disposable incomes adjusted for seasonality, 2003-2024

At the same time, there is likely to be a kind of optimism inflation in the polling data due to the distortion of the real situation in the country by the official and censored media environment and the general climate of opinion that encourages the dissatisfied to either avoid participating in surveys or not to share their negative feelings.

Signs of this can be found in some survey research with detailed or less obvious questions. For instance, a consumer sentiment study conducted by ROMIR and Yakov & Partners (formerly McKinsey's Russian office) generally confirms the positive picture of social sentiments but adds several important nuances. Compared to 2022, in 2023, respondents expressed less concern about their income level (–31%) but increased concern about preserving savings (+11%) and long-term stability (+5%). Additionally, when asked how long it would take to return to the wealth levels of 2019 (i.e., pre-pandemic levels), 20% of respondents in 2022 believed such a return was impossible in the foreseeable future, whereas in 2023, this response was chosen by 40%. This response dynamic seems paradoxical: current assessments of material conditions significantly exceed 2019 levels. At the same time, these assessments apparently reflect a range of social frustrations that are not captured by questions about the dynamics of the current material situation.

ROMIR data indicates that respondents' concerns are related to macroeconomic and political issues rather than personal finances and work. For example, 37% of respondents cite the 'special military operation' as the main reason for their concern about the safety of their residence, while a third of respondents consider the 'special military operation' as the reason for their worries about long-term stability and personal psycho-emotional and physical well-being. Respondents with average incomes perceived changes over the past year most optimistically. Against this backdrop, it is quite striking that indicators of social frustration typical for low-income groups are at the same levels among high-income group members.

Changes in assessments of well-being factors over the last year by level of well-being, %

Thus, it can be said that the impressive growth in positive assessments of social well-being is linked to the pronounced positive dynamics of incomes and wages, which have significantly influenced the self-perception of key groups that have been able to improve their material situation. However, these shifts are accompanied not only by the traditional dissatisfaction of low-income groups but also by social frustration typical of high-income groups, related to a lack of a sense of long-term stability and low ratings on a broader range of social satisfaction indicators.