Another fallacy born of bad data and terrible intuition appears, at last, to be crumbling under the weight of its contradictions. Rosstat’s income data reveals a 35% gap between the median and average wage, with the official median wage in April last year at 73,400 rubles per month. Sber’s data, by contrast, put it at 61,000 rubles. Back in 2021, the median wage hovered closer to 40,000 rubles. This massive gap between median and average wages lays bare what close observers—and those who have left the Moscow and St. Petersburg bubbles—have long understood: the «winners» of the war, particularly the managerial class and middlemen enriching themselves, are paid handsomely, while everyone else simply struggles to get by.
The median wage rising by roughly 50% in four years dramatically exposes the absurdity of the persistent claim that real wages have increased since the invasion. According to Rosstat’s consumer price indices (benchmarked against Q4 2020), prices had risen 49.2% by the end of 2025. I instinctively prefer Sber’s data as a pocket of relatively independent analysis, less subject to the pressures in Moscow to produce positive aggregate statistics that paint a rosier picture for superiors. There will always be quibbles over methodology and data accuracy, but the fundamental reality remains: judging from Russia’s trade data and what we can glean from the national balance of payments, it would be fitting if median wages have, at best, merely kept pace with inflation.
Cross-check wage data against TsMAKP’s industrial production indices, and a clear picture emerges: non-military production has declined since late 2024, creating a widening gap with military output—even as the latter stabilizes. Add to this the projection that food and basics will account for 39% of household spending in 2026—a sixteen-year high—and the concern deepens, given that food prices have consistently risen at rates far exceeding headline inflation.
There was never convincing evidence that Russian consumer industries roared back to life after February 2022. Far too many observers mistook the economy’s sudden absorption of slack labor and surging nominal growth for genuine real-terms growth. If that were true, regional governments would not have seen their finances deteriorate so sharply—from already worsening 2023−2024 levels to outright acceleration in 2025, when falling real incomes translated into deficits surging into the several trillions of rubles. Regional tax revenues are pro-cyclical, tied to taxes on incomes, corporate profits, and consumption. If Russians were truly becoming wealthier in real terms, one would expect that to have buffered the shock from falling oil revenues (though it could never fully offset such a shock). Instead, the economy’s apparent exit from overheating in the first half of this year supports the conclusion that the current stalling growth regime—sustained by military spending—is hollowing out incomes. Raising tax rates can boost revenues, but only for so long.
Just as there is a cottage industry perpetually predicting Russia’s economic collapse, there is its mirror image insisting that expecting a crisis is foolish. The latter camp is correct, at least insofar as whatever might constitute an economic crisis will not arrive as a predictably foreseeable chain of events—at least if we define crisis as a rupture so disruptive that it materially alters the regime’s ability to sustain the war or its own existence. Rather than rupture, we are better served by thinking in terms of continuums.
Much of the imperviousness that skeptics of «crisis» attribute to the Russian economy stems from the assumption that meaningful wealth gains from the 2023 boom created a margin of safety—the kind of logic that underpins the «death zone» argument, which the regime is exhausting, albeit slowly. Yet those gains are nowhere to be found substantively in the data, whether nationally aggregated or otherwise. Aleksandr Novak’s claim that falling inflation forms a base for economic growth is an old trope among policymakers, dating back to responses to the Global Financial Crisis. In Russia, inflation and its interaction with the effect of imports on the ruble’s value have always been meaningfully correlated with nominal wage growth. We have exited the phase of the continuum that delivered strong nominal growth without real growth, and slid instead into weak nominal growth accompanied by steepening real-terms declines.
Low inflation means low nominal wage growth—a sustainable dynamic in a normal economy (if a weak equilibrium for growth), but one that makes less sense as a growing swathe of businesses swing from profit to loss. January data showed businesses imported just $ 1 billion of goods through parallel import schemes—half the average level seen in 2025. Juxtapose these declining import figures with signs that the regime is squeezing more industrial production out of the economy, and the pattern is clear: people are consuming less because they are earning less. Businesses are buying less because they are earning less too. If 2025 gave us a year’s worth of data pointing to an emergent civilian recession, the early signs in 2026 suggest it is picking up speed—and there was never a margin of safety from prior real-income gains to fall back on.
There are also the unintended consequences of recruitment bonuses on the labor market. If payouts are rising for recruits even as the broader labor market and wage growth weaken, people are voting with their wallets: their lives will be worth more if they are to take the risk at the front. Hence the effect on incomes is more pronounced, skewing the data somewhat by sustaining a large pool of outliers who receive huge cash infusions into their bank accounts, while most people continue to see their wages fall in real terms (albeit at differing rates). Crisis or no crisis, the implication remains the same: Russians are growing poorer. Some are certainly richer than they were in 2021; some are getting by. But those insisting things are fine or merely muddling along have no compelling answer to the obvious question: where exactly has all the money gone if so many saw real-terms gains over the last four years?
