The size of real wages in Belarus by purchasing power parity exceeded that in Russia, calculated HSE experts
Photo: Viktor Drachev / TASS
Real wages in Belarus has exceeded that of wages in Russia, follows from the special monitoring “cross-country comparisons of wages in the years 2011-2017”, which was prepared by the experts of the Institute of social policy Higher school of Economics.
Economists compare wages in dollars in Russia, CIS and Eastern Europe, as well as in China and Brazil in terms of purchasing power parity of currencies (PPP equalizes the purchasing power of currencies of different countries). In the calculations the authors used data from the world Bank on PPPs in 2011, as well as the exchange rate and the inflation rate in the countries under review in subsequent years. Russian wage level remains above most CIS countries in 2017 its average amount was $1640 at PPP was estimated at HSE. The only state in the CIS, surpassing Russia was Belarus, where the average wage at PPP last year reached $1648.
Competition with Minsk
In 2011-2014 Russia is still consistently ahead of Belarus in terms of wages, it is clear from the calculations of Economics. But gradually the gap was reduced, in 2011 it was $338, and in 2014 — $95. By the end of 2015 (the first after the devaluation of the ruble) Belarus took the lead average salary at PPP was $1556, and in Russia — $1530. Although in 2016, Russia has once again regained its position of ($1561 compared to $1517), a year later, Belarus was ahead of her again, although only slightly — the gap $8 was the minimum for the period (denomination in Belarus in 2016 factored into calculations).
As noted in an interview with RBC researcher at the Belarusian economic research and education center (outreach) Dzmitry Kruk, in 2017 in Belarus was indeed recorded growth in real wages, though not a radical (according to the national statistics Committee, it was 7.5% the previous year). “Peak real wage was in the middle of 2014, then they declined for three years until resumed [growth] last year, around the second quarter”, — said the expert, noting that the dynamics of wages at PPP has its own characteristics and may differ.
The situation in Russia
In 2015, real wages in Russia fell by 9% compared to the previous year, experts from the HSE, citing Rosstat. In subsequent years, it grew at a slow pace: the growth amounted to + 0,8% in 2016, plus 2.9% in 2017. The growth of nominal indicators in these years was 5.1, 7.9 and 6.7%, respectively. The devaluation of the ruble in 2014-2015 has resulted in a reduction of wages in Russia in dollar terms, economists say.
The Ministry expects a slowdown in real wage growth with the planned 6.3 per cent in 2018, to 0.8% in 2019. As follows from the forecast of the Ministry of (*.pdf), first and foremost, this is due to the high base in 2018, as the salaries of the social workers (they came under the decrees issued in may 2012) brought to the target level, and the minimum wage raised to a living wage. Other reasons may be the acceleration of inflation and the change in the timing of indexation of public sector wages (from October 1, 2019 instead of 1 January this year). In 2020, wages will grow by 1.5% in 2021-m — 2.3%, and in the next three years, by 2.8% annually, predicts the Ministry of economic development.
The closest to Russia’s average salary level countries are Kazakhstan and Azerbaijan in 2017, the wage there was 76% of the Russian average ($1252 PPP). In General, all CIS countries, except Belarus, comparable wages are lower than in Russia. In Ukraine earlier decided to withdraw from the CIS, average salary PPP also stably lower than the Russian indicators. In 2017 it is $1074 (65% from Russia).
Eastern Europe and BRICS
Among Eastern European States Russia is second in terms of wage at PPP countries such as Poland ($2343), Czech Republic ($2026), Croatia ($1950) and Hungary ($2107), to be monitored. Bulgaria and Romania from Russia at the level of the salaries are lagging behind, however, in recent years, the wage gap between Russia and these countries is rapidly shrinking, experts say.
As for the two considered in the monitoring partners for BRICS, their the level of wages in Russia is ahead. In China, when the nominal exchange rate of the currency salaries greater than Russia’s, but in the transition to calculations in PPP terms Russia retains a higher rate, experts say the HSE. So, in 2016 (comparable data for 2017 in China yet), the average salary in China was $1461, and in Russia — $1561. But the gap is also declining: in 2011 it amounted to more than $450, and in 2016 — $100. In Brazil, the average salary last year reached only $1407 — level wages in Russia exceeds stable.