Developed minimalism

The authorities came up with how to “defeat” poverty by falling income of Russians

The news that the Ministry of Labor proposed to abolish the consumer basket is not so news. The main decisions on this subject were adopted at the end of 2020. It was then that the federal law was adopted, which provides for a new procedure for calculating the cost of living and the minimum wage (minimum wage), as well as the abolition of the institute of the consumer basket.

Since the new order becomes a reality, it is worth trying to analyze how it will work in the current economic conditions, what consequences can be.

Previously, in order to calculate the subsistence level, the so -called absolute approach was used: a set of goods that made up the minimum consumer basket was determined. The cost of such a basket was equal to the living wage.

With this approach, questions constantly arose about the validity of both the inclusion of certain goods in the consumer basket, and in which quantity they should be represented there. The best world practice has long abandoned the use of the absolute approach: the subsistence minimum is calculated in a certain percentage or for the average per capita or to median income. As a rule, this is somewhere around 50-60%.

Finally, we began to count the living wage and the minimum wage in a different way, based on median indicators. The cost of living today was determined as part (44.2%) from median income, and the minimum wage as part (42%) from the median salary. With this approach, it turned out that the subsistence minimum in the whole in the Russian Federation for 2021 is 11,653 rubles, and the value of the minimum wage is 12,792 rubles per month.

A natural question arises: what kind of interest are these - 44.2% and 42% - strange?

So, in the EU countries, the cost estimate of the subsistence level today is 60% of the country's median disposable income (after paying all taxes and mandatory payments).

The explanation here is simple: these 44.2% and 42%, respectively, is actually fixing today's indicators, but with a small indexation compared to last year’s indicators, by the minimum wage (by 5.5%) and for the cost of living (by 3.7%).

Imagine that if in Russia they used the percentage that is in the EU countries today. In a good way, it would be necessary to do so, because it is not an absolute, but a relative approach. Both the subsistence levels and the minimum wage are determined in relation to Russian indicators. So it was necessary to do so because if you decide to switch to a new methodology, then we must switch to the advanced and well -established. And the indicators of percentage ratios are key in this methodology.

However, we decided to do it in our own way, because if we did it as there, this would lead to a sharp increase in the number of poor in the country

(those whose income is below the line of living). And what then to be with the achievement of a national goal - a reduction in the level of poverty in the country by 2030? We already have this goal of this goal at the seams. And here are still such things. So we have these “strange” percentages.

Now about the possible consequences of refusing the consumer basket. If the cost of living is set in percentage to the median income, and the real disposable incomes of the population fall, which, as you know, is happening with us, then in real terms the cost of living will even decrease. It turns out that such an approach can even become profitable for achieving a formal indicator to reduce poverty levels in the country. Let me remind you that, according to Rosstat, the real disposable incomes of the population in Russia decreased by the accumulated outcome from 2014 to 2020 by 10.6%. Such a paradoxical situation can turn out.

It would seem that we begin to use a more correct methodology, and here such incidents. I think that the explanation is simple here. It is unlikely that anyone in developed countries suggested (for that they are developed countries) that real incomes of people can decrease steadily over the years. It was not assumed, respectively, which in this case can decrease in the median value of this income, and with it the poverty line. They did not assume, because there is no such thing, but we have. And we may well get a situation where very soon the number of poor in our country will formally noticeably decrease.

It is difficult to imagine that the authorities thought that way. They just once again not everyone calculated.

And another news. In the last statistical material of Rosstat about the main socio-economic indicators, data on the dynamics of the disposable incomes of the population for the first quarter of 2021 were not presented.

Not published. This, actually, is unprecedented. I honestly don’t even remember this.

No data, no problem? Or on the eve of the announcement of the presidential message, the Federal Assembly did not want to publish (maybe, after all, to publish or disclose?) Not the most rainbow numbers? If with such a key indicator they can act in the same way, then with indicators of median income and median salary, I expect that there will be even greater difficulties. And then how to understand the correctness of calculating the subsistence minimum and minimum wage?

That's the problem: it seems that they take a step in the right direction, but everyone is managing to go somewhere. Annoying.