ISSN 1075-7007, Studies on Russian Economic Development, 2017, Vol. 28, No. 6, pp. 663–671. © Pleiades Publishing, Ltd., 2017. Original Russian Text © O.V. Kuznetsova, 2017.
REGIONAL PROBLEMS
Structural Changes in Employment and the Quality of Life of the Populations of Russian Million-Plus Cities O. V. Kuznetsova Federal Research Center Informatics and Control, Russian Academy of Sciences, Moscow, 119333 Russia e-mail:
[email protected] Received February 27, 2012; in final form, April 10, 2017
Abstract⎯This paper considers structural changes in employment and the labor compensation fund of cities with a million-plus population, as well as changes in their role in the economy of the country and regions. It has been shown that the concentration of the population in the largest cities continues to increase, while the nature of changes in their role in manufacturing and retail trade proves to be contradictory. At the same time, Russia and other countries are characterized not so much by the outflow of industry from cities as its transformation. The problems of the social sphere of cities have also been shown. DOI: 10.1134/S1075700717060077
During the discussion of the federal regional policy of the Russian Federation in recent years, the issue of the special role of large urban agglomerations in regional development has been repeatedly raised. This issue, which is based on the generally accepted idea that key cities are points of growth, was reflected, among other things, in Presidential Decree No. 13 of January 16, 2017 “On the Approval of the Fundamentals of the State Policy of Regional Development of the Russian Federation through 2025.” The document considers further development of the urbanization process as one of the expected results of implementing such a policy. At the same time, until recently the processes taking place in the cities have been neglected. Among the reasons for this is that the federal policy pays insufficient interest to socioeconomic problems of municipalities. The situation only began to change after 2008 with the exacerbation of the problems of million-plus cities and the development of their state support system. Although the statistical indicators for municipalities are still much smaller than for the subjects of the Russian Federation; nevertheless, there is a certain amount of data for the last few years (2009–2015), which makes it possible to estimate the changes in the structure of the economy based on the number of employed and the labor compensation fund by type of economic activity [1]. The search for an answer to two interrelated issues about the change in the concentration of economic activity in the largest cities and the structural shifts in their economies, is important not only in terms of understanding economic processes but also assessing changes in the quality of life of the population. The
increasing concentration of the population leads to contradictory results; opportunities for the self-actualization of citizens increase, while additional transport, environmental, and housing problems arise. Structural changes in the economy of cities lead, first, to a change in the ratio of high- and low-paid jobs and a number of other aspects. The decline in industrial functions of cities observed in the 1990s was due to a decline in industrial production, as well as a relatively low level of wages in industry, while the share of the working class in regional centers and large cities declined, and its further reduction was predicted [2]. The industry gives economic stability to the development of million-plus cities, but this industry is either refining and metallurgy, or the food industry and other import substituting industries that work for the markets of the cities and their immediate surroundings; in mechanical engineering, the crisis recession was not overcome in the 2000s [3]. The decline in industrial production in the largest cities was higher compared with other types of settlements, while the share of raw materials sectors and sectors oriented towards local or regional consumers increased [4]. Currently, the industrial potential of a number of major cities is building up through processes of active modernization, restructuring, diversification, and development of promising science-intensive developments and technologies at enterprises of the defense industry complex [5]. If one turns to foreign practice, then, first, if industrial enterprises leave cities, for a number of reasons, they still remain fairly close to them. Second, not all processing industries leave cities. For high-tech indus-
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tries, the costs of remoteness are higher than those of low-tech industries, as cities are centers of knowledge and innovation. Third, increasing the fragmentation of value chains leads to the fact that the specialization of enterprises becomes more functional than the industry. As a result, more complex types of production remain in cities, while simpler ones move to places with lower costs. Thus, a city can only lose its industrial importance in the production of simple cheap products, but remain a center of high-tech production. From the point of view of the population’s quality of life, this means that low-paid jobs move away from the city and high-paid jobs remain [6]. Another argument in favor of industrial development in key cities is the best opportunities for clustering in industry, which is given great importance under modern economic conditions [7]. The main factor in the economic growth of cities is human capital, so new production appears in the largest agglomerations, while simple manufactures are taken from cities [8, 9]. This pattern is traced in relation to many countries, including Germany [10]. The movement of processes towards the periphery can concern not only the production of goods, but also the service sector [11]. It is quite logical to assume that, over time, decentralization of not only industrial functions but also, for example, trade will begin. An increase in labor productivity in industry can and should take place in the largest cities, as well as in general; therefore, workers should be liberated everywhere, the quality of life should be improved, and the service sector on the ground should develop. As part of our study, we sought answers to the following questions: (1) Do million-plus cities continue to lose their role in industry and develop in the service sector? (2) Is possible to see signs of modernization in the industries of the cities. At the same time, there was in no way a task of making a general characterization of the features of the social and economic development of Russian cities, since these works have already been carried out and published, including in the pages of this journal [12, 13]. Features of statistical data used. The objects of our analysis are million-plus cities (since the end of 2012, there have been 15 such cities in Russia). We consider these cities within the official borders of the subjects of the Russian Federation (Moscow and St. Petersburg) and in urban districts (other million-plus cities), and we do not consider urban agglomerations. The chosen approach is explained by the fact that, first, the process of establishing boundaries of agglomerations is always ambiguous, and in itself can be the object of a separate study. Second, from the point of view of estimating the quality of life of the population, the situation is important namely in the official boundaries of cities, since the solution of many social and infrastruc-
tural problems important for the population depends on the city authorities and the state of the city budget. In most cases, it is impossible to recalculate data on the territory of the city in old or new boundaries. This is also true for Moscow; there are hardly any statistical data on the territories included in the composition of the capital since July 1, 2012. However, this does not cause a strong error in estimates; the population of “new Moscow” at the end of 2012 was only 2.1% of the capital’s population. The peculiarity of Russian statistics is the strong limitation of data on municipalities. There are data on urban districts in terms of the types of economic activity on the average number of employees of organizations; the labor compensation fund; and, accordingly, the average monthly wages of workers. The lack of data on the gross municipal product of course limits the possibilities of the research. At the same time, wages are most accurately calculated component of the gross product (when calculating it by income), whereas, for example, the profits of companies are not always tied to the place of its actual receipt. For the city subjects of the Russian Federation, another array of data that gives the most detailed information on the structure of the economy of the territories can be drawn to analyzing the situation; the data of the Federal Tax Service on the receipt of the personal income tax. The statistics for 2015 contains data for 71 types of economic activity, while Rosstat’s statistics on GRP and employment the data are broken down by 15–17 types, and the statistics of the volume of shipped industrial products by only 12 sectors. Data on the total amount of tax revenues by types of economic activity are also published, but they depend on a variety of factors (e.g., VAT refund to exporters, interregional differences in tax rates, and several others). With regard to personal income tax, the tax rate is the same for all regions, established social deductions are unlikely to make a significant contribution to the structure of personal income tax revenues, and there are no special problems with the territorial linkage of the tax. Thus, data on the sectoral structure of personal income tax can be regarded as data on the industry structure of the wage fund. Another peculiarity (and problem) of the Russian municipal statistics is that they are collected for large and medium-sized enterprises, while the regional statistics are gathered for a full range of enterprises. In other words, it is impossible to ensure complete comparability of data for Moscow, St. Petersburg, and other million-plus cities, as well as get a full picture of employment for the latter. To understand the extent of distortions, we can focus on the situation as a whole for Russia, Moscow, and St. Petersburg. According to the preliminary data from a continuous survey of small businesses, on average, in Russia in 2015, the share of small enterprises in the structure of employed was just over 15%, and in Moscow and St. Petersburg, it was
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Table 1. Changes in the populations of million-plus cities Population at end of 2015
Share of city in region population* at year’s end, %
Share of city in Russia’s population at year’s end, %
Million-plus city
Novosibirsk Yekaterinburg Nizhny Novgorod Kazan Chelyabinsk Omsk Samara Rostov-on-Don Ufa Krasnoyarsk Perm Voronezh Volgograd Total for 13 cities Moscow St. Petersburg Total for 15 cities
thousand people
percent of 2005
2005
2009
2010
2015
2005
2009
2010
2015
1584 1478 1276 1217 1192 1178 1171 1120 1111 1068 1042 1032 1016 15485 12330 5226 33041
113.4 110.3 98.7 109.4 109.1 103.5 102.4 106.2 107.9 116.0 104.9 122.0 102.5 107.9 112.9 110.9 110.2
52.7 30.4 37.6 29.6 31.0 56.0 35.9 24.5 25.3 31.7 36.1 36.6 38.9 – 61.7 73.7 –
53.2 31.3 38.5 30.1 31.2 56.0 35.8 24.8 25.4 33.3 36.5 41.1 39.2 – 61.8 73.9 –
55.3 32.2 38.1 30.2 32.5 58.4 36.2 25.5 26.1 34.5 37.6 41.8 39.1 – 61.9 74.0 –
57.3 34.1 39.1 31.5 34.1 59.5 36.5 26.4 27.3 37.3 39.5 44.2 39.9 – 62.9 74.4 –
0.98 0.94 0.90 0.78 0.76 0.80 0.80 0.74 0.72 0.64 0.69 0.59 0.69 10.02 7.63 3.29 20.94
0.99 0.96 0.90 0.80 0.77 0.79 0.79 0.73 0.72 0.67 0.69 0.59 0.69 10.09 7.97 3.38 21.44
1.03 0.95 0.88 0.80 0.79 0.81 0.82 0.76 0.75 0.69 0.69 0.69 0.71 10.37 8.08 3.43 21.88
1.08 1.01 0.89 0.83 0.81 0.81 0.82 0.77 0.76 0.72 0.71 0.71 0.71 10.63 8.43 3.57 22.63
* Hereinafter, regions are subjects of the Russian Federation, the centers of which are city municipalities; for Moscow and St. Petersburg, this includes the capitals and the surrounding oblasts (Moscow and Leningrad oblasts, respectively). Source: Here and below, unless otherwise indicated, Rosstat data and author’s calculations on their basis.
different (figures were about 18% and 28%, respectively) [14]. It can be assumed that employment in small businesses accounts for about 20–25% of employment in the largest cities. The main share of employed in small enterprises falls on the service sector; on average, in Russia, the share of people employed in wholesale and retail trade in the total number in small businesses was 26.8%, while the share of employees in transactions with real estate, rent, and services was 22.7%. Processing industries only accounted for 15.5% and construction for 11.9%. Because of these differences in municipal and regional statistics, to assess the role of city municipalities1 in the economies of subjects of the Russian Federation, it is reasonable to use estimates that are directly given by Rosstat [15], since this guarantees the reliability of the data. For our study, two indicators are of interest, i.e., the share of the city in the volume of shipped goods of own production, the work and services performed in-house for the processing industries (hereinafter, referred to as processing industries), and the city’s share in the retail trade turnover. Compara1 This
paper uses the term “city municipality” to mean “citymunicipal formation” as opposed to “city subject of the Russian Federation.” STUDIES ON RUSSIAN ECONOMIC DEVELOPMENT
ble data have existed since 2005, when the transition to OKVED All-Russian Classifier of Economic Activities took place. We also analyze data on wages by types of economic activity. In the absence of information on the incomes of the population in municipalities, the differences in wages in different sectors are the only available data that allow one to judge the differentiation of the incomes of citizens. In addition, the dynamics of wages in a given type of activity relative to the average for the city makes it possible to speak of the prospects of the development of this type of activity. Concentration of the population and economic activity in million-plus cities. One of the factors that determine the change in the role of the largest cities in the economy of the regions is the dynamics of their population. As shown by an analysis of the statistical data, the share of million-plus cities in the regions have increased over the 10-year period, but the scale of the concentration and actual change in the populations of the cities have differed markedly (Table 1). Voronezh holds a special place among million-plus cities. While in other cities the population grew gradually, the population in Voronezh increased by almost 16% in 2010 alone. The reasons for this were actively discussed in the region’s media; the city and regional Vol. 28
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authorities sought to turn Voronezh into a millionplus city2, believing that this status would allow it to claim additional federal support. The sharp increase in the city’s population first occurred when its borders were changed; nearby urban settlements were included in the urban district, which is allowed by the current legislation on local self-government. The increase in the number of urban residents is also influenced by the registration of migrants, which was the second reason for the growth in the population of Voronezh, which was established during the All-Russia Population Census of 2010. Moreover, Voronezh was not the only million-plus city in which the population increased significantly according to the census results. This growth accounted for more than 4% in Novosibirsk, Rostov-on-Don, and Volgograd. Another prominent million-plus city is Nizhny Novgorod, the only one of the largest cities, where, on the contrary, the number of residents over 10 years has declined. This is a reflection of general trends in the dynamics of the population of Russian regions. Traditionally, there has been a decrease in the number of residents in the Far East, which in fact leads to the loss of population over the 10-year period with 4.1% (from the end of 2005 to the end of 2015). In terms of the decrease in the number of residents, it is followed by the Volga Federal District (VFD), where the indicator was 2.6% (in the Siberian Federal District (SFD), this indicator was 0.9%). In other federal districts, as well as in Russia as a whole, the population increased (in the Russian Federation, excluding the Crimea, by 0.7%). Of course, differentiation by the subjects of the Russian Federation within the boundaries of one federal district reaches significant proportions. Nizhny Novgorod oblast is not the most problematic region in the Volga region; nevertheless, the population of the region decreased by 4.5% over 10 years. This is the worst indicator among all subjects of the Russian Federation with million-plus cities. The remaining cities in question are located in regions with different patterns of population dynamics. It increased in the Moscow and Leningrad oblasts, Bashkortostan, Tatarstan, and Novosibirsk oblast. The population declined by less than 1% in Samara, Sverdlovsk, and Chelyabinsk oblasts, as well as Krasnoyarsk krai. If we exclude Voronezh from the analysis, Krasnoyarsk will become the leader in terms of concentration growth, followed by industrial Sverdlovsk and Chelyabinsk, then Perm and Novosibirsk. The actual importance of a million-plus city in the population of the subject of the Russian Federation to which it belongs depends on the features of the historically established system of resettlement in the region. In terms of the role of million-plus cities in processing industries and retail trade turnover (Table 2), 2 Voronezh
and Krasnoyarsk have become million-plus cities at the end of 2012, Perm at the end of 2011, and Volgograd at the end of 2010.
one can first see of all the instability of the indicators by years, especially in industrial production, which can be associated with a change in the ratio of product prices and with structural reorganization of production. It is difficult to identify obvious trends in the changing role of city municipalities, whereas the situation develops differently in the regions. It is important that there is no obvious trend that Moscow and St. Petersburg are losing their role in Russian industry; rather, their role is growing, albeit unstably. At the same time, Moscow’s share in the retail trade turnover of both the country and the Central Federal District (CFD) is steadily falling. The role of St. Petersburg (Northwest Federal District, NWFD) is stable, but there was no hypertrophic development of the sector either. Industry of million-plus cities. As a rule, the mining industry is not inherent in the urban economy; however, there is a certain proportion of employees in this sphere, e.g., in the cities of a number of oil regions because of the headquarters of large companies of this industry. Thus, in 2015, in Samara, Ufa, and Krasnoyarsk, the share of people engaged in mining operations exceeded 1% (1.2–1.5%). In Moscow, this figure was only 0.1% (the number of employed in the sector decreased since 2009 by almost a quarter). In the mining sector, the salary level is significantly higher than average for the city’s economy. For example, in Ufa, in some years, it was four times higher than average, while in Krasnoyarsk it was three times and in Samara it was two times higher. In other words, the opening of the headquarters of commodity companies in the city leads to the emergence of a small stratum of highly paid employees. There is no strong differentiation by the role of employment in the production and distribution of electricity, gas, and water between cities. In this sector, the economies of city municipalities employ an average of about 4% of the employed population. Thus, in 2015, the minimum indicator for this sector was observed in Kazan (2.8%), while the maximum indicator was found in Voronezh (4.8%) and significantly lower indicators were seen in Moscow and St. Petersburg (1.1% and 1.6%, respectively). The level of wages in this sector is usually 10% higher than average for city economies. The dynamics of the number of employed people varied by city, but in general, for the period under review (2009–2015), it hardly changed. The share of processing industries in the employment structure has declined almost everywhere, which confirms the forecast estimate given above, although there is an exception, i.e., St. Petersburg (Table 3). However, it is fundamentally important that the level of wages in manufacturing industries everywhere approached the average in the economy. As a result, in 2015, in seven out of the fifteen million-plus cities, the salary in this sector was higher than the average for the economy and, in another city, Voronezh, it was almost
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Table 2. Changing role of million-plus cities in manufacturing and retail trade turnover, % City share in region manufacturing industries
Million-plus city Novosibirsk Yekaterinburg Nizhny Novgorod Kazan Chelyabinsk Omsk Samara Rostov-on-Don Ufa Krasnoyarsk Perm Voronezh Volgograd Moscow in RF St. Petersburg in RF Moscow in CFD St. Petersburg in NWFD
City share in region retail turnover
2005
2007
2009
2011
2013
2015
2005
2007
2009
2011
2013
2015
70.9 16.7 33.4 20.9 31.4 96.3 24.7 50.3 52.6 26.5 56.7 58.3 65.0 11.3 4.2 38.7 34.0
69.1 18.8 30.2 17.6 34.4 96.5 26.3 48.8 49.0 23.8 61.2 58.7 64.6 13.2 3.9 41.8 33.9
58.1 22.3 21.8 23.1 36.5 95.1 30.7 47.1 58.6 24.8 64.2 47.3 66.4 11.4 6.9 36.5 48.2
67.0 19.9 22.9 19.5 37.8 90.8 26.8 40.0 57.4 29.7 64.2 46.3 64.5 10.5 7.6 35.6 50.8
66.5 23.1 29.8 19.9 37.9 96.2 25.2 35.8 67.0 35.3 68.2 51.7 65.3 12.9 7.4 40.7 49.9
63.7 23.2 29.5 20.9 37.4 95.0 25.8 42.7 52.7 35.2 57.0 42.2 63.9 14.5 6.0 43.2 44.0
85.5 65.4 69.4 57.7 55.4 90.2 42.5 51.0 53.7 54.8 73.4 62.6 69.5 22.5 4.2 61.0 43.4
79.5 66.9 69.4 56.8 57.6 92.3 43.2 52.5 59.7 53.2 75.5 68.4 68.5 18.8 4.1 54.5 44.0
83.9 66.2 69.5 58.2 66.9 85.8 47.5 57.2 53.6 64.9 76.6 61.1 72.5 17.3 4.2 51.4 44.0
84.1 69.6 70.7 55.8 63.0 88.6 68.6 47.7 56.9 70.4 77.1 62.9 72.8 17.4 3.9 50.4 42.6
84.0 67.3 52.8 55.8 58.6 81.8 57.6 45.3 n/a 73.1 66.1 65.4 64.7 17.0 3.9 50.0 42.9
84.1 63.3 58.5 52.4 55.3 84.5 55.6 42.2 56.5 67.6 65.1 63.0 61.8 15.8 4.2 46.5 43.9
equal to the average and, in no other city, it was less than 90%. This indirectly confirms the hypothesis that the industries of the largest cities is gradually becoming more complex. Complication of the structure of manufacturing industry is confirmed by data on the change in the structure of personal income tax (Table 4). Particular attention should be paid to the noticeable reduction in the role of the food industry in St. Petersburg and much less in Moscow; the growing role of chemical production in Moscow; and a very significant increase in the share of production of electrical, electronic and optical equipment in both cities. It is also obvious that, in many branches of mechanical engineering in the two cities, there are multidirectional dynamics; in certain cases, growth is associated with the loading of enterprises of the defense industry complex. All of this reflects the features and complexities of the development of mechanical engineering in the country at the present stage. Nevertheless, the results of calculations do not make it possible to say that the production of consumer goods is developing and will develop in the largest cities in Russia. Because of its simplicity, it will be rather moved outside of the city boundaries. Employment and wages in the sphere of market services. The differentiation of wages based on the type of economic activity in million-plus cities is determined by the differentiation of wages for different types of services. While for the country as a whole, the level of STUDIES ON RUSSIAN ECONOMIC DEVELOPMENT
salaries in agriculture remains the lowest3, in the vast majority of million-plus cities (excluding Kazan and Volgograd), the outsiders are hotels and restaurants, which is not surprising, since a significant number of employees in this segment are engaged in unskilled labor. This is important to keep in mind when making tourism development plans in Russian cities and regions. On one hand, tourism can contribute to the creation of additional jobs in the absence of other investors in order to provide a multiplier effect for developing the economy of the territory (additional loading of food industry enterprises, production of souvenirs, and transport). On the other hand, this leads to a significant increase in the proportion of lowpaid workers. Currently, the role of hotels and restaurants in the employment of city municipalities is small, on the average about 1%, while in Moscow and St. Petersburg, this indicator is higher (2.0% and 2.3%, respectively). The section “financial activity” (with the exception of Nizhny Novgorod, where the highest salary is observed in “transactions with real estate…”) is leading in terms of the level of wages in million-plus cities. However, the role of financial activity in employment is also not too high; usually, its share is about 4%. Even 3 In
most million-plus cities, the share of people employed in agriculture is less than 0.5% (including Moscow and St. Petersburg) due to the inclusion of rural settlements in the boundaries of urban districts.
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Table 3. Changing role of manufacturing industries in economies of million-plus cities, %
Million-plus city
Novosibirsk Yekaterinburg Nizhny Novgorod Kazan Chelyabinsk (2010) Omsk Samara Rostov-on-Don Ufa Krasnoyarsk Perm Voronezh Volgograd Moscow St. Petersburg
Share of employed in manufacturing industries in number of employees at organizations
Share of employed Ratio of wages to average Dynamics in manufacturing industries of employed for city economy in labor compensation fund people, 2015/2009, % 2009 2015 2009 2015
2009
2015
17.8 17.8 20.5 22.5 29.0
15.3 15.1 18.5 20.0 28.8
15.1 16.4 17.9 19.6 28.8
14.0 15.6 18.8 19.1 28.3
84.5 91.5 86.3 85.9 98.7
90.9 102.6 101.5 94.6 97.7
85.5 85.8 85.6 90.9 97.4
22.2 20.7 15.2 21.1 18.9 28.5 22.4 19.8 10.4 14.3
22.0 21.2 12.9 19.3 14.4 27.5 19.1 16.1 8.1 13.6
20.9 17.5 14.9 23.1 16.4 28.5 20.1 18.0 8.0 14.6
22.8 20.2 14.1 20.4 13.6 27.5 19.2 16.9 7.5 14.6
93.3 84.0 96.5 108.1 86.1 99.0 88.6 90.4 77.3 102.2
103.0 95.1 108.3 105.4 93.8 98.0 99.4 104.3 92.1 107.4
94.2 94.4 78.7 87.5 77.9 93.0 85.1 72.6 83.1 100.2
in Moscow, it is 5–6% and, in St. Petersburg, it is 2.0– 2.5%. Nevertheless, the number of people engaged in financial activities is growing, which is easy to explain by the high level of wages. However, there is no obvious dependence of the dynamics of employment by types of economic activity on the level of wages in them. For example, in million-plus cities, throughout 2009–2015, the number of people employed in trade increased, despite that the level of wages in relation to the average for city economies was declining in this sector. In city municipalities, wholesale and retail trade usually accounts for about 10% of employed people (let us recall, this excludes small businesses); in Moscow, this accounts for about 25–27% and, in St. Petersburg, it is about 22% of people. In city municipalities, approximately the same number of employed people, almost 10%, usually accounts for transport and communications; in Moscow, it is about 7% and, in St. Petersburg, it is 9%. The situation in the section “transactions on real estate, renting, and provision of services” cannot always be explained. This is due to the fact that this section includes completely different types of activities, i.e., real estate transactions, scientific research, the IT sector, and business services (legal, consulting, etc.). Accordingly, the cities vary greatly in terms of the share of employed in this sector, the dynamics of employed people, e.g., despite the high level of wages in this sector, the number of employees in the sector
has been declining in Omsk, Samara, Rostov, and Volgograd, while the level of wages in Chelyabinsk was generally lower than the average for city economy. In city municipalities, the differentiation of activities by wages at the end varies from 2.0 times (in Volgograd) to 2.7 times (in Novosibirsk). The differences in Moscow and St. Petersburg were expected to be higher by 3.6 and 3.0 times, respectively (2015 data), which reflects a certain pattern (as a rule, the higher the level of development in the territory, the higher the differentiation of the population by income). Employment and wages in the social sphere of million-plus cities. From the point of view of the population’s quality of life, the situation in the education and healthcare of cities is of great importance. Unfortunately, in these areas, the situation is not the most favorable. First, the number of people employed in education decreases almost everywhere, while in health care, in several cities, the situation is the same (Table 5) and, in these sectors, there is almost no small business. To be fair, it should be noted that there is no widespread increase in employment in the state administration, on the contrary, in several cities, the number of employees in this segment has decreased noticeably. Second, although the level of wages in education and health care in city municipalities gradually approaches the average level for urban economies, this process is much slower than the subjects of the Rus-
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Table 4. Structure of personal income tax receipts by type of processing industry, % Moscow
St. Petersburg
Types of processing industries Processing industries, total Manufacture of food products, including drinks Manufacture of tobacco products Textile and clothing manufacture Wood processing and production of wood and cork products, except furniture Manufacture of pulp, wood pulp, paper, cardboard and articles thereof Publishing and printing activities, replicating of recorded media Production of petroleum products Chemical production Manufacture of rubber and plastic products Manufacture of other nonmetallic mineral products Metallurgical production and manufacture of finished metal products Manufacture of machinery and equipment Manufacture of electrical, electronic and optical equipment Manufacture of cars, trailers, and semitrailers Manufacture of ships, aircrafts, space vehicles, and other vehicles Other production
2009
2015
2009
2015
100.0 16.9 0.7 2.1 1.1 1.7 14.7 1.4 7.6 2.4 3.3 4.6 10.7 16.8 2.5 9.1 3.5
100.0 15.3 0.4 1.8 0.8 0.7 12.4 1.2 11.3 2.0 2.9 6.4 11.4 20.6 2.4 7.1 2.6
100.0 15.6 2.0 2.4 1.6 1.9 5.1 0.2 6.4 2.2 4.1 9.5 15.7 16.8 2.5 10.5 2.9
100.0 9.7 1.3 1.9 1.2 1.9 3.2 0.2 5.7 2.5 3.2 8.8 17.3 22.5 4.6 13.3 2.2
Source: author’s calculations based on the data of the Federal Tax Service.
Table 5. Dynamics of the average annual number of employees at organizations in nonmarket activities in million-plus cities* State administration Million-plus city
Novosibirsk Yekaterinburg Nizhny Novgorod Kazan Chelyabinsk (2010) Omsk Samara Rostov-on-Don Ufa Krasnoyarsk Perm Voronezh Volgograd Moscow St. Petersburg
Education
Healthcare
share in the total share in the total share in the total number number number of employees, % 2015/2009, % of employees, % 2015/2009, % of employees, % 2015/2009, % 2009
2015
2009
2015
10.4 9.5 10.5
9.5 9.9 9.0
9.9 9.6 11.2 10.2 11.7 8.4 12.0 10.1 10.5 10.7 3.4 3.9
2009
2015
90.8 105.1 81.6
13.4 13.1 11.2
13.0 11.6 10.9
96.7 89.0 92.7
11.3 9.9 8.7
11.5 10.1 9.4
101.9 102.6 102.3
9.1 10.0
94.0 101.6
15.9 13.8
15.2 13.0
97.6 92.4
10.3 10.3
10.2 10.9
101.4 104.0
10.2 9.8 12.6 8.4 11.1 9.8 9.2 11.1 3.9 3.4
86.5 88.8 100.1 95.4 94.5 92.0 87.4 93.1 121.9 90.1
13.6 11.3 13.0 13.3 14.5 12.6 14.7 13.4 6.4 6.3
12.8 10.8 12.7 12.4 14.3 10.5 14.3 13.6 5.5 8.9
89.9 88.6 91.0 89.2 100.4 79.5 97.0 90.6 91.8 148.0
13.2 9.3 10.0 11.3 12.3 10.1 13.5 10.4 5.2 5.1
13.3 10.4 11.6 11.3 12.6 9.8 13.2 11.5 4.3 5.9
95.5 103.9 107.7 96.5 104.7 93.2 97.2 98.3 88.5 121.5
* Public administration, section Public Administration and Ensuring Military Security; Social Insurance; healthcare (hereinafter), section Healthcare and Provision of Social Services. STUDIES ON RUSSIAN ECONOMIC DEVELOPMENT
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KUZNETSOVA
Table 6. Ratio of wages in education and healthcare and average for the economy, % RF subject, 2014
City, 2014
City, 2015
Million-plus city Novosibirsk Yekaterinburg Nizhny Novgorod Kazan Chelyabinsk Omsk Samara Rostov-on-Don Ufa Krasnoyarsk Perm Voronezh Volgograd Moscow St. Petersburg Average in Russian Federation
education
healthcare
education
healthcare
education
healthcare
90.8 87.4 89.0 77.8 75.4 80.8 88.0 82.7 79.1 77.6 87.6 88.9 83.8 – – –
93.9 98.6 82.7 80.5 82.7 79.9 85.2 85.1 88.8 79.8 92.4 83.6 87.7 – – –
79.2 79.3 74.0 77.0 79.4 78.1 75.1 70.3 70.6 71.5 81.1 79.1 73.7 93.4 93.3 79.6
83.5 92.9 74.9 77.9 89.7 78.1 82.3 79.8 81.2 77.3 84.4 77.8 81.1 88.9 98.1 83.3
77.4 80.5 73.0 76.6 80.1 76.1 75.5 69.2 72.1 73.1 83.8 79.7 73.6 96.1 91.0 79.1
84.0 91.3 72.2 79.1 90.4 77.9 80.9 80.8 83.3 76.3 81.4 79.0 82.3 90.1 98.7 82.8
sian Federation (Table 6) [17]. The reason for this situation is quite understandable. To a large extent, the growth in wages in the social sphere is related to the May decrees of the President of the Russian Federation, one of the requirements of which is precisely bringing the wages of public sector employees to the average in the economy. For Moscow and St. Petersburg, as subjects of the Russian Federation, this average salary is calculated for the city as a whole, while for city municipalities, it is calculated for the subjects of the Russian Federation. And since the level of income in rural areas is lower than in cities, the average value is lower. Wages in the state administration in all millionplus cities were higher than the average for the economy. In 2015, waves varied from 106.9% of the average in Yekaterinburg to 129.9% in Krasnoyarsk. Lower values of this indicator were in Nizhniy Novgorod (109.0%), St. Petersburg (108.7%), and Moscow (111.6%); in other cities, this indicator is closer to 120%. CONCLUSIONS Thus, if the concentration of the population in Russian million-plus cities continues to increase, the situation with the changing role of the largest cities in manufacturing and retail trade in the regions develops in different ways. At the same time, there are fluctuations in indicators over the years, which is not surprising in the context of a general structural adjustment of the Russian economy. With respect to Moscow and
St. Petersburg, the assumption was that the largest cities lose their former role in retail trade. The number of employees in manufacturing industries and the role of this type of activity in the employment of the population continue to decline almost everywhere. At the same time, for Russia it is fair to say that cities face not the reduction of industry, but with its transformation and modernization. This is evidenced, firstly, by the growth of wages in manufacturing as compared to the average for the economy of cities, and secondly (judging from the data on the receipt of personal income tax), the increasing role of technologically complex industries in the structure of manufacturing industries in Moscow and St. Petersburg. It can be assumed that in the future the changing role of the manufacturing industry in the economy of cities, as well as the cities themselves in the regional industry, will depend on the structural transformation of the entire Russian industry. If it is possible to create conditions for the development of high-tech industries in the country, the role of industry in cities and cities in the country’s industry will increase. On the other hand, if the orientation of the country’s economy toward raw materials is preserved, it is very likely that cities will be more specialized in trade and intermediary functions. The challenge for Russian million-plus cities is the difficult situation in the social sphere: the level of wages in the education and healthcare of cities is getting closer to the average for city economies, but much slower than subjects of the Russian Federation, of
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which these cities are the center. In addition, the number of people employed in education decreases almost everywhere (compared to the growth of the populations of cities), as well as the number of people employed in health care in a number of cities. All of these processes require special attention in state and municipal social policy. ACKNOWLEDGMENTS The study was carried out with financial support from the Russian Science Foundation (project no. 1618-10324 “People in Megalopolises: Economic, Demographic and Environmental Features”) at the Institute of Economic Forecasting of the Russian Academy of Sciences. REFERENCES 1. Rosstat. Database of Indicators of Municipalities. AllRussian Electronic Resource. http://www.gks.ru/ free_doc/new_site/bd_munst/munst.htm. 2. V. N. Leksin, “Cities of power: The administrative centers of Russia,” Mir Ross. 18 (1), 3–33 (2009). 3. N. V. Zubarevich, “Development and competition of the largest cities of Russia during periods of economic growth and crisis,” Reg. Issled., No. 1, 45–54 (2010). 4. N. Yu. Vlasova, “New and old functions of the largest cities in Russia (evolution or revolution?),” Ross. Sovrem. Mir, No. 4, 88–92 (2002). 5. E. G. Animitsa, “The largest cities of Russia in the context of global urbanization processes,” ARS ADMINISTRANDI (Iskusstvo Upr.), No. 1, 82–96 (2013).
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Translated by K. Lazarev
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