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Socio-Economics: Labor - Budget - Pensions

Abstract

The article is devoted to the problems of pension provision for Russian citizens, operation of the pension system and corresponding legislation. The key aspect of the author’s approach and the main thesis of the article is that the low pension income and the artificial reduction of the number of pension recipients are harmful not only from a social and humanitarian, but also from an economic point of view. Using the case of State Duma’s consideration of the law on the renewal of full-scale indexation of pensions, the author argues in favor of such a renewal. 1. The policy of “under-indexation” of pensions leads to a further decline in the standard of living of one of the most vulnerable groups of the Russian population. 2. This policy artificially defers the economic development of the country, so far as the effective demand for domestic commodities decreases. The article analyzes one of the key proposals of the so-called A.L. Kudrin plan (who is a former Russian Minister of Finance and incumbent Deputy Chairman of the Economic Council under the President of the Russian Federation) on the need of increase in the retirement age. The main objections against this proposal are as follows. 1. The growth of unemployment and of spending on unemployment allowances. 2. The rise of morbidity and of spending on health insurance. 3. The decrease in life expectancy. 4. The deterioration of conditions and quality of education for children of preschool and primary school age. The author comes to the conclusion that increase in the retirement age in Russia has already begun and will create a group of new poor people, who are deprived of income in the form of both pensions and wages. In 2017, their number can reach 70 thousand people, and since 2020 one in seven of those who have the right to retire at a modern retirement age will be in such a condition. The idea of A.L. Kudrin seems to be especially outdated in the light of the expected widespread unemployment around the world as an outcome of the digital revolution and the progress of automation, when in the most developed countries the issue of universal basic income is discussed. In the author’s opinion, the decent pension income of the older generation is an investment in human potential, which in this case is able to turn into human capital and have a significant impact on the modernization of the economy and social sector.

About the Author

Oleg Smolin
State Duma of the Federal Assembly of the Russian Federation
Russian Federation


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Review

For citations:


Smolin O. Socio-Economics: Labor - Budget - Pensions. Russian Journal of Philosophical Sciences. 2017;(6):7-22. (In Russ.)



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ISSN 0235-1188 (Print)
ISSN 2618-8961 (Online)