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Thursday, February 22, 2018

“Lowering living wage explained by the imperfection of the calculation methods”

The Russian government took strange on the background of what is happening in the economy, the decision to reduce the minimum subsistence level for nationals of the country in the last quarter of 2015 – now he is 9 452 9 ruble against 673 in the third quarter of last year, “losing weight” on 221 rouble.

photo: Gennady Cherkasov

“At first glance, this decline seems paradoxical really. For the average consumer, the layman, it seems even geeky.

No one in our country did not cancel inflation. Prices are rising every day. But this paradox is indeed possible. It is due to some imperfection of the methodology for calculating the cost of the minimum consumer basket, which is the main determinant of the subsistence minimum.

So, some of the goods included in the minimum consumer basket, were actually able to demonstrate some reduction in prices in the fourth quarter of 2015. For example, the products occupy 50% of consumer basket. Specifically, potatoes every Russian there is more than 100 pounds. Other vegetables — about 115 pounds. If the prices of some vegetables fell slightly, it could affect the definition of the subsistence minimum in General even though other goods, occupying a smaller share of the minimum consumer basket, became more expensive.

In my opinion in order not to excite the public when such incidents occur, the government simply don’t have to go to the lower cost of and to leave it at former level”, — believes Professor of the Higher school of economy Igor Alekseev.

“Information about lowering the subsistence minimum was merely theoretical and applied does not matter. She is tentative, – says senior analyst “Alpari” Anna Bodrov. – The real figures show that in reality the standard of living of Russians has become much lower.

This trend is traced from the fourth quarter of 2014 remains in force at the beginning of this year and will be relevant for at least 6 months. The authorities could lower the level of the subsistence minimum, but these figures will remain only on paper, because the everyday life of Russians is constantly going up”.

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