Are we getting rich or dying out?

Russian government established the living wage for the first 6 months of 2004.
For the second quarter of 2004, the government established the living wage: for an average Russian person - 2,363 (about $80) roubles per capita; for working people – 2,588 roubles; for pensioners – 1,793 roubles; for children – 2,313 roubles.

According to the prognoses of the Ministry for Economic Development, the living wage will be slightly growing in the years to come. The number of people having income below living wage, will be 17.5% of the overall Russia’s population, in 2005 – 14.5%, in 2006 – 12.5%, in 2007 – 10.5%. The real income of people will be growing by 8-9 percent a year in 2005-2007.

At the same time, the government stated that since January 1, 2005 the minimum salary will be 720 roubles ($24) per month. The pension for elderly people will be increased by 250 roubles in 2005. At the end of 2005, the average pension will be 2,467 roubles. The average pension will exceed the living wage by 5-6%. On the whole, the pensions will be raised by 12% in 2005.

However, the high-ranking officials forgot to mention the inflation which will diminish all the above pay raises. But why frustrate the people which is not having a happy life? Moreover, the officials are not accountable to people. All looks good on the paper. Look, how we raised the figures.

The beautiful fairy-tale about growing people’s well-being was spoilt by the Ministry of Finance whose officials plan to cancel the reduced taxes for some food and medicine since January 1, 2006. This means raising taxes for these goods by 6 percent. 

Department of Economics

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Author`s name Evgeniya Petrova