What are the income levels? State Social Policy - EC1201: Macroeconomics - Business Informatics

The level and quality of life largely depend on the income of the population, so it seems necessary to consider this phenomenon in more detail. The total income of society produced in the economy is distributed in accordance with the contribution to its production of all factors of production: labor, land, capital and entrepreneurial ability. Such distribution is called primary (functional). The result of it is factorial, or primary, income, the main forms of which are: wages, entrepreneurial profit, interest and rent. Their sizes depend on competitive conditions.

Marginal productivity is not the only distribution criterion in the economy, since it leaves behind those individuals who do not own any of the factors of production, and therefore cannot receive factor income (in particular, the disabled, the elderly, minors). Their incomes (social transfers in the form of pensions, allowances, stipends, various payments) are not conditioned by participation in social production and are the result of redistribution, or secondary (personal) distribution of functional incomes. The size of secondary incomes significantly depends on the social policy pursued by the state.

Sources of income can also be profit from personal subsidiary plots, participation in shadow or criminal activities, inheritance, lottery winnings, etc. It follows that personal (personal) income can be much more sources.

So, the income of the population is all the funds in kind and in cash received by households. They may be in kind or cash. In-kind income is all receipts of agricultural products, livestock, services and other products in kind.

Cash income of the population is the amount of money received by households for a certain period of time and intended for the purchase of goods and services for personal consumption. In general, the monetary form of income is more common than the in-kind, but the share of in-kind income is higher among the poor than among the rich.

To assess the level of income, the concepts of nominal, disposable and real income are used.

Nominal income is the total amount of money income, independent of taxation and price levels.

Disposable income is nominal income minus taxes and other obligatory payments, i.e. funds directly used by the population for consumption and savings.

Real income is the amount of goods and services that can be purchased with the amount of disposable income. The amount of real income depends on its nominal level, taxes on income and prices for consumer goods. Real incomes of the population are determined only in dynamics for a specific period of time using the consumer price index, which is calculated for each month and for the year as a whole:

RD \u003d (ND - NP) / I (1.1)

where RD - real incomes, r.;

ND - nominal income, r.;

NP - taxes and obligatory payments, r.;

I - consumer price index.

Sometimes the real incomes of the population are determined through the purchasing power of money, which characterizes the change in the volume of goods or services that can be purchased for the same amount in different periods of time. The calculation of real incomes according to this method assumes that the quality of goods and the ratio of prices within one or another of their groups does not change, there is no shortage of goods and state regulation of prices. If these conditions are met, the purchasing power of the monetary unit is determined by the physical volume of goods that can be bought for the amount of per capita income. The result obtained quite accurately characterizes the changes in real money incomes of the population for the period under study.

Depending on the cycles of human life, income is divided into received:

1) before participation in labor activity (before reaching working age);

2) from participation in labor, entrepreneurial, social activities;

3) temporarily unemployed (unemployed, refugees, etc.);

4) after completion of labor activity (by pensioners).

From a legal point of view, income is legal (legal) and illegal (illegal). The second group includes income from duly unregistered activities; hiding from taxation or having a criminal origin, etc.

All incomes of the population can be divided into two large groups: wages and non-monetary incomes.

The wage, or wage rate, is the price paid for the use of labor. The term "labor" is often used by economists in a broad sense, i.e. includes wages:

Workers and employees of various professions;

Diversified specialists - lawyers, doctors, dentists, teachers, etc.

Owners of small businesses - hairdressers, plumbers, TV repairmen and many different merchants providing services in the course of business activities.

Although in practice, wages can take various forms of bonuses, fees, commissions, monthly salaries, we will refer to all this with one term "wages", which will mean wage rates per unit of time - per hour, day, etc. This designation has certain advantages because it reminds us that the wage rate is the price paid for the use of a unit of labor services.

It is also necessary to distinguish between monetary, or nominal, and real wages. Nominal wage is the amount of money received by an employee for a certain period of time (hour, day, week, etc.). The disposable wage is the amount of wages minus income tax and mandatory contributions to the Social Security Fund. Real wages are the amount of goods and services that can be purchased with nominal wages; real wages is the purchasing power of nominal wages. Obviously, real wages depend on nominal wages and the prices of goods and services purchased. The percentage change in real wages can be determined by subtracting the percentage change in the price level from the percentage change in nominal wages. Thus, an increase in nominal wages by 9% with an increase in the price level by 5% gives an increase in real wages by 4%. Note also that nominal and real wages do not necessarily change in the same direction. For example, nominal wages may rise and real wages fall at the same time if commodity prices rise faster than nominal wages.

Wages perform several functions, the most important of them - reproductive, stimulating, status, regulatory, production-share.

The reproductive function consists in determining such an absolute amount of wages that allows for the normal reproduction of the labor force. Therefore, this function plays a decisive role in relation to others. This became especially relevant in the late 90s, when all issues related to wages are reduced to the possibility of ensuring a decent standard of living. In the case when wages at the main place of work do not provide the employee and his family with normal reproduction, the problem of additional earnings arises. And they don't always produce positive results. Additional work leads to the depletion of labor potential, a decrease in professionalism, and a deterioration in labor and production discipline.

The status function of wages implies that the status determined by the amount of wages corresponds to the labor status of the employee. Employment status is the place of an employee in relation to other employees. Therefore, the amount of remuneration for work is one of the main indicators of this status, and its correspondence with the labor efforts of the employee makes it possible to judge the fairness of the size of his wages. The status function is important, first of all, for the workers themselves in terms of their claims to wages and requires a material base for its implementation.

The stimulating function of wages involves the motivation of the employee to labor activity, to maximize returns, and increase labor efficiency. This goal is to establish the amount of remuneration for work, depending on the results achieved by the employee. If the salary does not depend on the personal efforts of the employee, then this will lead to a weakening of the stimulating function and, consequently, to a decrease in initiative and labor activity. The implementation of this function is carried out by the management of the company through various systems of remuneration.

The regulatory function of wages affects the ratio of labor supply and demand, the formation of personnel and the degree of its employment. This function acts as a balance between employees and the employer. The basis for the implementation of the function is differentiation in wages by groups of workers.

The production-share function of wages determines the degree of participation of living labor in the formation of the price of goods, its share in total production costs and labor costs. This share allows you to set the value of the labor force, its competitiveness in the labor market. This function is important not only for the employer, but also for the employee. Some tariff-free wage systems and others imply a close connection between wages and the wage fund, the personal contribution of the employee.

The main sources of non-monetary income of the population are public consumption funds and personal subsidiary plots.

Public consumption funds are a kind of collective form of consumption and form the material basis for the functioning of the sphere of free public services. Hospitals, polyclinics, schools, colleges, universities, kindergartens, nurseries, and cultural institutions are maintained at the expense of such funds. By providing these services free of charge, a higher level of consumption is ensured for all segments of the population.

Public consumption funds differ from the distribution of income through wages and property in that the benefits received do not become personal property, do not form income in the literal sense of the word for each person. These benefits remain public property, are shared, and increase the size of total per capita income.

In the funds, cash payments make up half of the total amount of consumption funds, and slightly less than half of these payments are the costs of providing the population with free or preferential terms of services for the upbringing and education of the younger generation, vocational training, and health protection. Similar types of services are provided at the expense of the local budget for municipal health care, education, and culture institutions. The variety of cashless income options depends on the economic capabilities of the regions. The most common of them are free travel for pensioners and other groups of the population, benefits for utilities, subsidies for food. Firms provide benefits for keeping children in kindergartens, health camps, and travel by public transport.

The informal sector of the economy has a significant impact on the socio-economic situation as a whole, the standard of living of the population, and the state of the labor market. The informal sector is actually an independent segment of the labor market with a significant number of employees, certain areas of activity.

The boundaries between the concepts of the shadow economy and its informal sector are rather conditional.

Informal economy is considered by the International Labor Organization as a set of very small business units that produce and distribute goods and services. They consist mainly of independent, self-employed producers. Some of them also use the labor of their family members, several hired workers. The business units are household enterprises.

Shadow economy is a broader concept. It includes all economic activities that are not recorded by official statistics and are not subject to taxes, that is, the informal sector and illegal activities.

It is assumed that the enterprises of the "shadow economy" are larger than those of the informal sector and are not household enterprises.

So, the informal sector refers to unregistered economic activities carried out by citizens, independently or within small production units at their own expense or using the means of labor of enterprises in the formal sector.

The amount of unrecorded income, along with income from informal employment, also includes hidden wages in the formal sector, income from “shadow” transactions, which cannot be determined. According to the most general estimates, the share of the informal sector itself accounts for about three-quarters of all unrecorded incomes of the population.

The most typical types of informal activities are: street trading; services to the population in construction, repair, tailoring; private services - cleaning, cooking; tutoring, private lessons; as well as brokerage and intermediary activities. All these activities in most cases are carried out without patents, contracts, and are not declared to the tax office.

For most people, income from informal employment is secondary. First of all, this applies to those who work part-time or are on administrative leave; those employed in low-wage industries.

It can be assumed that a significant part of the people who are counted as the economically inactive population are actually employed in the informal sector. This is caused either by a conscious shift to the informal sector in search of higher incomes, or by the inability to find work in the formal sector.

Young people and students in general are most involved in the informal sector. Older people with additional income, especially pensioners, usually receive it from informal employment. People with a high level of education are less likely than others to have additional income in the informal sector.

The informal sector involves significantly more people with high incomes than those with low ones. But this does not indicate a high level of income in this sector, but the higher incomes of people who generally have additional earnings.

In countries with developed market economies, the source of information on the income of the population is sample surveys of households; data of declarations of individuals on their income submitted to the tax authorities; indicators of wages and final consumption expenditures of households in the System of National Accounts (SNA). In the Republic of Belarus, incomes are studied based on the Balance of Money Income and Expenditures of the Population and sample surveys of about 6,000 households.

The process of reforming the Belarusian economy will be characterized by significant fluctuations in real incomes of the population in different years. In the first half of the 90s. 20th century they steadily declined, and in 1995 their level was only 62% of the 1990 figures. Starting from 1996, the decline in incomes was suspended, and then their growth began. This trend has been especially pronounced since 2000. The growth of real GDP, the attenuation of inflationary processes, the acceleration of wage growth in order to reach its level of 100 dollars. The United States has led to an increase in real money incomes of the population, which, according to the Balance of Income and Expenditures, steadily exceed the 1990 level.

Thus, the income of the population is all funds in kind and in cash received by households. They may be in kind or cash. When we talk about cash income, we should take into account their purchasing power, i.e. distinguish between nominal and real income. Nominal income is a certain amount of money with taxes, etc., while real income is the amount that can be exchanged for goods and services.

The income of the population is one of the most significant indicators of the standard of living in the country. Population income- means that come at the disposal of people from society and its institutions according to the results of the functioning of the factors of production belonging to them: labor, capital, land, entrepreneurship. Income can be received from production activities, from property, as well as as a result of redistribution operations.

The income of the population is the sum of in-kind and monetary receipts. Cash income very diverse in form - wages, business income, social transfers (including pensions, scholarships, allowances), proceeds from the sale of personal and household property, income from the rental or sale of real estate, from the sale of agricultural products, dividends. Income in kind - this is, in terms of value, in-kind receipts from personal subsidiary plots, goods and services consumed without any compensation, payment for labor with products.

Real income of the population- the number of commodities (goods and services) that can actually be purchased by a person with his income. Thus, the real incomes of the population are determined by the size of nominal incomes, the level of prices for goods and services, and taxes.

Incomes can be legitimate, that is, obtained legally, or illegitimate. Incomes received from unregistered activities in accordance with the established procedure, hidden from taxation, having a criminal origin, are illegal, obtained illegally, and therefore illegitimate.

The level of income of the population is directly affected by the state of the country's economy, the ongoing social policy. At the same time, it is also impossible to exclude the influence on the income level of the population of the individual properties of people that are essential for labor and labor relations, especially their efficiency and diligence, attitudes towards well-being as the value and purpose of life, inclination to leadership, predisposition to individual or joint work. etc. Among the factors influencing the level of income, one cannot exclude the influence of luck and luck.

On the other hand, incomes themselves turn out to be a factor in many social phenomena, in particular, influencing employment, professional career, quality of life, social relations, behavior and consciousness of people. Thus, with sufficient funds, a person can change one job for another, get an education and make a professional career, acquire means of production and become an owner, entrepreneur or self-employed worker.

Income is a factor in the stratification of society, the emergence of inequality in it. At the same time, social inequality and economic inequality are distinguished. Social inequality consist in unequal access of various categories of the population to socially significant benefits, scarce resources, liquid values. Economic inequality is that a minority always owns most of the national wealth. This phenomenon is also known as the Pareto law, according to which there is always an inverse relationship between the level of income and the number of their recipients.

On the one hand, the population of any country is unevenly distributed by income level, on the other hand, the total amount of income is also unevenly distributed across population groups. To measure the level of inequality in the distribution of income, the so-called Lorenz curves and Gini indices are used.

Max Otto Lorenz (Eng. Max Otto Lorenz)

American economist who came up with the idea of ​​graphically depicting population income concentration. The principle of constructing curves to reflect the degree of income differentiation was outlined by Max Otto Lorenz in his work “Methods for measuring the concentration of wealth”, published in 1905, as well as in the work “Fundamentals of Economic Theory”, prepared jointly with R. Ely, T. Adams and E .Yang and published in 1908.

Max Otto Lorenz was born September 16, 1876 (Burlington, Iowa), studied at the University of Wisconsin, worked in various US government agencies, died July 1, 1959 in Sunnyvale, pc. California.

Gross income is dominated by cash income, representing the amount of money that a household has to cover its expenses. Monetary income is formed from the following sources:

1) wages of household members received in the course of fulfillment of labor agreements upon employment, as well as bonuses, permanent salary increments, payments by employers for social and cultural purposes: benefits, payment for transport services, vouchers, etc.;

2) income from entrepreneurial activity in the form of profit, dividends, interest on securities and deposits, rent, etc.;

3) state social payments (transfers) of pensions, allowances and other payments from the budget and off-budget social funds.

4) other receipts (insurance compensation, income from the sale of property, etc.).

The ratio between these three sources changed dramatically: under the conditions of the administrative-command system with state property, the main incomes of households were wages and payments from the budget. With the development of market relations, the role of the second source began to increase. However, even today wages remain the main income. The value of a particular type of source in a particular family is determined by its social composition. Thus, there are households where wages are almost 100% of cash income, for example, a working married family without children. There are households where money income is formed only through state social transfers. For example, retired spouses raising young grandchildren. The structure of household income is influenced by the place of residence - in the city or in the countryside.

In Kazakhstan, cash income from employment in total cash income in 2010 was 81%; of the volume of income from labor activity, income from employment accounted for 70.9%; from self-employment and entrepreneurship – 9.5%; social transfers - 15.5%; property income - 0.7%; financial assistance from relatives and other income - 3.4%.

In addition, the cash income of households is replenished from in-kind receipts (for example, products produced on subsidiary plots or services performed for their own consumption, as well as inventory received as incentives from employers or the state).

Employment income - wage; all types of incentive pay, salary increments; fees; premiums; payments: from profit, sick leave, severance pay; compensation for medical expenses received from the employer, in cash and in kind.

Income from self-employment- Income from entrepreneurial activities in cash and in kind.

Social transfers– pensions, scholarships, allowances, compensation payments, additional benefits, charitable assistance.

property income– dividends and winnings on shares and other securities; interest on deposits, for the use of amounts provided in the form of debt; winnings on deposits; income from the rental of housing, vehicles, equipment, land.

Sales income- income from the sale of real estate, various products and goods; food products received from a personal farmstead (subsidiary farm); rendered on the side of various services.

Other sources of income- alimony, receipts from relatives and friends.

Disposable cash income- cash income minus mandatory payments and contributions.

Real cash income- cash income, taking into account changes in consumer prices.

- cash income minus mandatory payments and contributions, taking into account changes in consumer prices.

Cash income can be nominal(before taxes and mandatory payments) and disposable(after payment has been made). Real cash income- cash income excluding changes in consumer prices. Calculated by dividing cash income by the consumer price index. Real disposable money income-cash income minus mandatory payments and contributions, excluding changes in consumer prices.

The classification of income is based on different criteria.

1. Depending on the source of income, they are divided into:

Salary and additional payment for labor activity;

Income from business activities; income from valuable

Rent for property transferred for temporary use

Insurance compensation;

Income from the sale of property;

Payments from state monetary funds (budgets, off-budget

cash funds);

2. Depending on the uniformity of income, incomes are distinguished:

Regular (wages, rent, etc.);

Random or one-time (gifts, income from the sale of property)

3. Depending on the reliability of receipts, incomes are distinguished:

Guaranteed (state pensions, state income

loans);

Conditionally guaranteed (wages);

Non-guaranteed (fee, commission).

In Kazakhstan, there is a significant differentiation in terms of average per capita income used for consumption. The ratio of their maximum and minimum values ​​by region per year: in 2005 - 4.8 times, in 2010. - 3.7 times. The differentiation of the subsistence minimum is much less, although it is also quite large - 1.4 times.

The growth of income used for consumption in 2010 amounted to. - 22.5%. However, the cost of living in 2010 increased by 6.5%, that is, the real increase in income used for consumption amounted to 16%.

In 2005, the average monthly nominal cash income per capita amounted to 15.8 thousand tenge, in 2010. - 40.5 thousand tenge, which is 2.5 times higher than in 2005. Real cash income in 2010 increased by 10.2% over the year. The average monthly nominal wage per employee in 2005 amounted to 34.06 tenge, in 2010 to 77.5 thousand tenge, having increased by 14.6% compared to the previous year, and the real one – by 7.0%. The wages of agricultural workers remain constantly low - 41.3% of the national average; for employees of the financial sector, wages exceed the average republican level by 2.0 times; in industry - 1.3 times; Gender differences persist: the average wage for men is 1.3 times higher than for women. The gap across regions is also significant - 3.2 times

Due to the specifics of economic development, there were differences in the level and structure of incomes of urban and rural households, the cash income used for consumption by the urban population is 1.45 times higher than that of the rural population (30.5 thousand tenge against 21.0 thousand tenge). tenge); Poverty is more common in rural areas - the proportion of the population with incomes below the subsistence level, in cities - 3.7%, in rural areas - 10.1%.

In 2005, incomes exceeded the subsistence minimum by an average of 2.6 times, in 2010 - by 3 times.

Given that labor incomes account for almost three-quarters of all monetary incomes of the population, and more than two-thirds of them are the incomes of employees, it should be recognized that unemployment can play a significant role in the amount of income. Calculations show that between the level of unemployment and poverty of the population relative to the subsistence minimum, there is a noticeable relationship in terms of the correlation coefficient. A 1 percentage point reduction in unemployment results in a 3 percentage point reduction in poverty.

Social instability in society often leads to all sorts of conflicts.

One of the tasks of the state is the prevention of these conflicts and the maximum elimination of social inequality.

In order to determine the level of inequality, the state analyzes the amount of income of the population in order to further redistribute it among all levels of society.

The concept and types of income of the population

Monetary incomes of the population act as a set of all tangible and intangible values ​​reproduced within their own households over a certain period of time. They also include funds that were received from other external sources.

This indicator plays an important role in identifying consumption level of citizens one country or another.

Since the real level of profitability directly reflects the level of consumption of each person, it is used to compare the well-being of the population of different countries, cities and citizens with different living conditions. Most often, several economic indicators of profitability are used for this, namely, real and nominal.

All incomes of the population divided into several main types:

• monetary- consist of all kinds of income to the family budget exclusively in the form of cash;
• natural. This category of income includes products produced at the expense of own funds;
• nominal income- make up the sum of cash receipts of the population. They are calculated without taking into account taxes and price fluctuations for essential goods and services;
• real income- are essentially identical to the nominal ones. Their difference is that the calculation takes into account the influence of taxes and the price level (inflation);
• cumulative- income, which consists of the above types of income (in kind and cash);
• real disposable. This type refers to current cash income, net of all taxes and regular obligatory payments, and also takes into account the rise or fall in prices.

Since wages are always the main income of most citizens, wages are divided into nominal and real.

Nominal - funds received by the employee for a specified period of time. Its value is specified in the employment contract between the employer and the employee.

Real wages - shows the totality of all money received over a period of time, taking into account changes in consumer prices. It should be borne in mind that when the growth rate of nominal wages is less than the rate of increase in the general price level, then in this case the ability of wages to cover costs will gradually decrease.

What is nominal income

Definition nominal income applies to absolutely all types of cash receipts of citizens.

It consists of a set of material goods and funds received by the budget for a certain time.

Sources, with the help of which nominal income is formed, there are a lot, and they can be very diverse. But here are the main ones:

• income received as a result of business activities;
• salary;
• rent received by property owners;
• social transfer payments;
• payments received under government programs;
• profit generated by the growth in the value of securities (bonds, debt obligations, shares);
• funds received from bank loans, loans;
• lottery winnings;
• compensation payments;
• income from the sale of their own things.

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What is real income

Based on the fact that real income characterize the value that is derived by dividing nominal income by the inflation rate in real time and after taxes, then it can still be reflected in the totality of goods and services purchased for an amount of funds equivalent to nominal income.

Sources income of these two main types are identical.

Distinctive features

The indicators under consideration differ in that the nominal income reflects the amount of money that the family receives during the month, and the real income reflects the totality of goods and services that the family can afford to purchase during this period. Therefore, when prices rise, nominal income will be greater than real income, and vice versa, real income will be higher when prices fall.

Understanding the importance of money relations in the daily activities of people is also very important. To increase the nominal income, you need to have an idea about the existence of preferential goods and services.

There is also an increase in qualifications in their labor activity, which leads to an increase in cash receipts in the form of wages.

The amount of total cash receipts from residents to the state budget directly depends on the amount of material goods that each family has in stock.

These benefits include: real estate, land, transport, other values. All these components significantly increase the financial position of a person. Equally important is assigned to monetary assets that are in use by each member of society. Real incomes are directly related to the well-being of the population.

To increase the level of nominal income, the country's inhabitants sell their services to the labor market, conduct entrepreneurial activities or sell household products.

Real income can rise, as mentioned above, also due to falling prices and taxes. In addition, increasing real income is the task of the country's government.

It is implemented through the effective management of the state financial system and the correct conduct of monetary policy.

The higher the existing rate of inflation, the less goods and services a person can afford to purchase at the expense of income received. The sharpest and most unpleasant decline in real incomes hyperinflation. It leads not only to an unexpected drop in profitability, but also to the rapid destruction of the standard of living of the entire population.

Importance of the income level of the population for the state

As a result, we can conclude. The real income of residents is one of the most important indicators for the government of the country. It helps to determine the level of material security of the population.

In addition, with the help of this indicator, it is possible to influence the growth of the productivity of the working population. Therefore, research is constantly being conducted into new ways of calculating living standards indicators.

It is worth highlighting the ability of the value of real incomes of society to influence the social climate within the state. The amount of material wealth of the population, by its growth, motivates the improvement of the general standard of living of the whole country. For this, only one condition must be observed - an even distribution of real incomes among all citizens.

Real income, as an economic indicator, allows you to most effectively adjust the amount of profit received by all segments of the population, as well as develop new methods for increasing the standard of living in the country. After all, the higher the financial situation of society, the higher and more stable the level of financial revenues to the state budget.

The incomes of the inhabitants of the country at present are not at a high enough level to stabilize the economic and social situation in the state. But the government pays special attention to the development of bills, plans and all kinds of methods that will contribute in the near future to raising the general standard of living for all segments of the population.

On the income of the population and their types, see the following video lecture:

Nominal and real incomes

In any economic activity, both in production and in the family budget, not only the amount of disposable financial income is important, but also the amount of goods and services that can be purchased for this amount of money.

In economics, there are concepts of nominal and real income. What is it, what other types of profitability are there, how do nominal incomes differ from real ones - every modern person should have an idea about all this.

Definition

Income is the total cash payments, goods and services that an individual or legal entity receives over a certain period of time (most often, a time period of one year is taken in the calculation).

Monetary income of the population is a set of tangible and intangible values ​​produced by their own household in a specific time period.

In addition, they include funds received from external sources.

Income is classified into several main types:

Nominal income

Nominal income refers to absolutely all receipts of monetary amounts for a certain period of time and consisting of the total amount of material goods and money that replenished the budget. The sources that form the nominal budget can be very different. The main ones are:

• profits received from doing business;
• wage;
• rent received by the owner of the property;
• social payments;
• payments received under state programs;
• profit, which was formed with an increase in the value of securities (stocks, bonds);
• money borrowed from a bank;
• lottery winnings;
• compensation payments;
• income from the sale of personal belongings.

Real income

Unlike nominal incomes, real incomes represent all financial receipts, taking into account factors affecting the possibility of acquiring a certain amount of services and goods that are bought with this money. That is, it is the value obtained by dividing the nominal income by the current inflation rate. The sources of real income are identical to the nominal ones.

Real return is expressed in natural form by benefits and goods that can be purchased at the present price. It is an indicator of the subsistence potential of a certain source of income and is regulated by current prices. The real income of the population is considered part of the national income.

To determine the level of real incomes, it is necessary to combine all monetary and in-kind incomes of citizens. This amount includes: salaries, pensions, fees and other sources of profit.

The amount of deductions to the state budget, voluntary contributions to various organizations, contributions and payments for utilities are deducted from the obtained indicator.

The result is the level of actual income that people live on in a given period of time.

The value of the income of the population for the country

The real income of the population is one of the most important indicators for the government of the country, with the help of which the degree of material security of all citizens is determined. In addition, this indicator can affect the growth of labor productivity. Therefore, new methods for calculating the standard of living indicator are regularly explored.

The value of the real profitability of society affects the social climate in the state. With the growth of the material wealth of the population, the general standard of living of the state improves. To do this, it is necessary to observe the only condition - to evenly distribute real incomes to the entire population of the country.

Real income is an economic indicator that allows you to effectively adjust the quantitative profit that all segments of the population receive and develop new ways to improve the standard of living in the state. The higher the material condition of the society, the more stable and in large volumes the payments to the state budget will be received.

The ratio between real and nominal income is expressed by the formula: DR = DN / C. Where:

1. DR - real return.
2. DN - nominal yield.
3. C is the absolute price level.

Dynamics of real incomes

In order to determine the dynamics of real incomes of citizens, for example, in Russia, it is necessary to calculate how much the inflation rate differs from the growth of real wages.

The media often write that the salaries of the population have increased, therefore, the standard of living has also increased.

If we turn to statistics, indeed, over the past decade, wages have grown in many areas of the economy.

Does this mean that the standard of living has also risen? Economists are discussing this issue, and there is no final answer to it yet. If nominal wages rise faster than inflation (with fixed tax payments and stable utility costs), the real expression of return increases.

How to calculate real wage growth? For example, over the year, tax payments and prices for utilities did not increase in the country, and real wages increased by 10%. Annual inflation is 5%. In this case, the difference in real salary increase will be 5% (10% - 5%). This means that there is an increase in the economy and the population has more money.

Savings are spent on purchases or deposited in bank accounts. The bank will issue these funds as a loan to other individuals to expand their business, which will provide the population with new jobs and fill the market with a variety of goods, and so on. The savings of the population are:

• Personal. This is the portion of a family's after-tax savings that is not spent on consumer goods.
• Forced. The state restricts citizens in spending their money by compulsory subscription to government loans, increases consumer taxes and mandatory payments under the pension program.

When the growth of nominal wages is slower than inflation or is at the same level (with fixed taxes and a stable price of utilities), the real incomes of the population will decrease or remain unchanged.

Attention! When tax rates change, real incomes also change. When taxes are raised, workers' wages are cut twice. First, by paying an increased tax, the employee gives more money to the budget. Secondly, entrepreneurs who have lost part of their profits most often lower the wages of their employees.

Nominal income

Nominal income- the amount of funds (money) that a person receives in the form of salary, profit or rent.

Nominal income - the total amount of money at the disposal of the recipient.

Nominal income - profit expressed in monetary terms and representing funds without taking into account the inflation component, pricing policy and purchasing power of funds at a particular point in time.

Nominal income from assets (securities) - interest paid by the issuer. This type of profit differs from real income in that it does not take into account the main economic factors. As a rule, such funds have a monetary value.

Nominal income: essence and place in the classification

In most cases, the definition of "nominal income" refers to the income received by ordinary citizens during their lifetime. The concept of total profit includes the sum of material goods and means received and produced in a specific period of time. At the same time, the role of the received profit is determined by the level and activity of its consumption.

The cash income parameter includes all receipts from entrepreneurial activities, wages, scholarships, pensions, benefits, dividends from bonds, rent, profits from the sale of assets, agricultural products, real estate, various products, and so on. At the same time, the level of profit of each of the citizens of society is a key indicator of well-being, a high level of spiritual and material life.

Having a certain income allows you to meet basic needs, maintain a high level of health, get an education and relax. Among the many factors that affect the amount of income, one can single out the size of wages, the amount of profit on securities, the cost of prices, market saturation, and so on.

To assess the dynamics and level of income of the population, indicators of disposable, real and nominal income can be used. Each of them has its own nuances:

1. Nominal income (denoted as NT) - the total amount of funds that are received by specific individuals in a certain period of time. By nominal income, you can determine the level of profit of an individual without taking into account taxation.

2. Disposable income (denoted as DI) - income that can be used for personal savings and consumption.

Disposable income is lower than nominal income, because mandatory payments and taxes are deducted from it, that is, funds allocated for savings and consumption.

To measure the dynamics of disposable income, the parameter of real disposable income is used, which is calculated taking into account the index in the price sphere.

3. Real income (denoted as RI) - the total volume of services and goods that can be purchased with available funds within a certain period, that is, taking into account changes in the price level.

One of the main tasks for an individual is to maximize the level of profit, which is the basis for the activity of an active market participant, his incentive and impetus for development.

At the same time, a high nominal income is beneficial not only to a person, but also to society and the state. The growth of profits ultimately allows you to meet the needs of all areas, including production.

All segments of the population are covered (including low-income citizens).

The main principle of market strategy is the fact that not everyone can be rich in society. The main thing is that there are no poor people. At the same time, profit recipients are always concerned about three main points - the source of receipt, the justification of taxes imposed on profits, as well as the efficiency of using the funds received.

In fact, nominal income is a monetary assessment of the results of the work of a citizen or company, as a subject in the field of the economy. Economic theory pays special attention to this point. In it, income is a sum of money that is regularly and legally placed at the disposal of a person.

Nominal income, as a rule, has a monetary value. This means that the condition for obtaining it is mandatory participation in public life (primarily in the economic sphere). Each person undertakes to do something useful for society. At the same time, profit is the result of an individual's participation in economic life, because money can only be received from other people.

Violation of the dependence of nominal income on the market sphere occurs only under one condition - a person cannot take part in the economic process.

It is on his behalf that the government pays various benefits.

Nominal income is the result of useful actions of a person (entrepreneur, citizen) in relation to other people. Consequently, the level of profit depends on the coincidence of demand and offered goods (services). At the same time, the very fact of the interaction of supply and demand is a mechanism for the formation of nominal income in the country's economy.

Nominal income: features of formation and causes of inequality

As mentioned, this type of profit is formed from different sources. This includes financial receipts from government programs, factorial profit, and so on.

The money of hired citizens transferred for the performance of certain work also plays an important role in generating the profits of the entire group.

These include wages, labor factors, profit from the operation of the enterprise, income from bonds, and so on.

One of the main roles in the formation of nominal income is played by state aid payments. These funds cover the needs in the social sphere, optimize medical care, organize the payment of benefits to the unemployed, and provide assistance to low-income sections of the population.

It is important to understand that the ratio of wages and transfer payments has a direct impact on motivation. At the same time, the more nominal income a person has, the more actively society develops.

In the case of the dominance of wages, such qualities as initiative and responsibility appear. If payments under state programs increase, then reverse processes begin - there are prerequisites for dependency, abandonment of production activities.

It becomes easier for a person to live on everything ready than to go to work.

The nominal income received through the monetary system can be represented as:

– payments under government programs;

– profits from the growth in the value of debt securities (bonds), the growth in the price of shares, winnings and repayments on debt obligations;

- bank loans issued for housing construction, loans to members of consumer communities, and so on;

- winnings in the lottery;

– payment of various compensations in case of damage or injury;

- temporarily free capital, formed as a result of the acquisition of credit goods.

Other financial receipts include the income of the population received from the sale of things through buying outlets, as well as commissions.

In addition, nominal income includes (in addition to net profit) also mandatory payments. The latter are carried out through the financial system through fees and taxes. With the help of such payments, the state receives can generate additional resources.

Further, through the distribution of capital, the country provides assistance and support to low-income families. To avoid a shortage of funds, the government may set a ceiling on the income on which tax is not taken.

At the same time, inflated rates are set to increase incoming profits.

The sources of nominal income are very diverse. But despite this, the main components are profit from business activities, wages, social transfers, and so on. At the same time, the problem of inequality in the Russian Federation has become really painful in recent years. Sociologists, economists and other minds of the country regularly engage in public debate in order to find a way out.

Inequality in nominal income occurs due to a number of factors depending on the geopolitical, social and economic situation. The gap between rich and poor is growing every year.

This, in turn, leads to an increase in social tension. In the mass consciousness of citizens, the stereotype of equality is still preserved, so the “transitional” period is endured with great problems.

In Russia, little time has passed for people to adapt and come to terms with social gaps.

The main causes of nominal income inequality include:

- human capital (experience, education, personal qualities); - heredity (provision of resources, talent, and so on); - interest in work; - presence (absence) of discrimination;

– different values, level of luck and so on.

Nominal income is ... What is nominal income: definition, its essence, significance for society, formation

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What is nominal income? Description and definition of the concept.

Nominal income- this is income, which is calculated in financial net terms, without taking into account inflation factors, price levels, and the purchasing power of money.

The nominal income from the maintenance of securities consists of interest paid by the organization that issued them. These percentages are calculated from the par value of the security.

This income differs from real income in that it does not take into account the economic factors that affect it. Nominal income is an absolute monetary value.

Let us consider, in more detail, what nominal income means.

Essence of nominal income

Usually, nominal income is defined as the profit received by individual individuals throughout their lives. This includes the total amount of material resources and services produced and received for a certain period of time. The level and activity of consumption determine the role of profits.

Real money income includes profit from doing business, wages, scholarships, pensions, allowances, dividends from securities, income from the sale of agricultural products and real estate. In society, the level of profit of an individual citizen indicates his well-being, as well as the satisfaction of his spiritual and physical needs (health, education and recreation).

The amount of income is influenced by many factors, these are: the amount of salary, the amount of profit from bonds, the state of prices, the fullness of the market, and more.

The value of the nominal income of the individual for society

To assess the level of income of the population, it is necessary to take into account indicators of disposable, real and nominal income. All of them have their own differences:

• Nominal income (accrued income) is the total amount of funds received by individual individuals in a specific period of time. Nominal income determines the level of profit of a particular person without taking into account the payment of necessary taxes;
• Disposable income (net income) is money that can be used for personal purposes or savings. Typically, disposable income is below par because tax deductions have already been made;
• Real income (commodified income) is the total amount of goods and services that can be purchased with available disposable income in a certain period of time, taking into account changes in the price level.

The higher the nominal income, the more profitable it is for its owner and the state as a whole. The greater the profit, the better the needs of the life of the individual, the population and the production capabilities of the state are satisfied. As a result, the benefits are felt by all social strata of society.

It follows from this that the nominal income is monetary value the results of the work of a citizen or production, as a subject in the field of economics. Often, nominal income is expressed in monetary terms. Therefore, in order to receive it, it is necessary to participate in public life, since money is received only from other individuals.

However, there is a category of the population that is provided not through personal participation in the economic process, but through the entire society as a whole. On behalf of this society, the state pays them social benefits. This category includes refugees, disabled, disabled or unemployed citizens.

Since nominal income is the result of the useful actions of a certain person in relation to other objects of society, the level of profit depends on the coincidence of demand and the offered products of production.

Formation of nominal income

The sources of formation of nominal income are very different. It can be both wages for work at the enterprise, and wages of employees. We are also talking about profits received from holding securities or renting property.

However, one of the main roles in the formation of nominal income is played by state aid payments. These funds cover the needs in the social sphere. This includes education, medicine, unemployment benefits, assistance to low-income sections of society.

The amount of nominal income has a huge impact on the development of society. For example: the amount of wages significantly affects diligence in work, responsibility and work discipline. If the level of state aid is unreasonably high, then the society loses interest in active labor activity. It is always easier to live with everything ready.

With regard to the monetary system, the nominal income received can be divided as follows:

• payments under state programs;
• profits from the growth in the value of securities and repayments on credit obligations;
• bank loans issued for housing construction, loans to members of consumer communities;
• lottery winnings;
• payment of various fines or duties;
• temporarily free cash received as a result of the purchase of credit goods;
• other income received as a result of the sale of personal movable property (through thrift stores or the Internet).

In addition, mandatory payments are added to nominal income through taxation. Using these payments, the government generates additional resources and allocates capital.

From this capital, the state makes various social payments. In order to avoid a shortage of funds, the state may establish a threshold level of income that is not taxed.

At the same time, in order to increase incoming profits, inflated rates are set.

Nominal income and social inequality

Despite this number of sources of nominal income, some countries have strong social inequalities. This is influenced by a number of factors depending on the economy of a particular state, the social political situation.

Listing the reasons for the inequality of nominal incomes, we can distinguish the following:

• human capital (experience, education, professionalism);
• heredity (provision of resources, giftedness);
• personal interest in work;
• the presence of discrimination or its absence.

We briefly examined what nominal income is, its sources and formation, as well as its significance for society. Leave your comments or additions to the material.

Everything about the nominal and real incomes of the population in simple words

Surely you have noticed that in different years you can afford to purchase a different amount of goods and services for a certain amount of money.

For example, in 2010, for 1,000 rubles, you could buy 5 kg of meat, and in 2017, the money for you is much less, although the amount of money has not changed. All professional economists are well aware of this paradox.

And that is why they distinguish between real and nominal income. Below we will find out what types of income there are, and also find out what is the dynamics of real incomes of the population of Russia.

Types of income

Income is a set of cash payments, goods and services that a person receives for a certain period of time (one year is most often taken for the billing period). Income has the following structure:

• Cash income. The sources of cash receipts do not matter - it can be wages, various state benefits and payments, rent, an increase in bank savings, income from the sale of agricultural products, cash gifts, and so on.
• natural income. Natural income refers to the totality of goods that a person receives directly, and does not buy for money. These can be agricultural products (vegetables, fruits and other products that a person himself or collectively produced as a result of his labor), various gifts, material assistance, and so on.
• indirect income. Indirect income refers to income that a person receives for free using various social infrastructure institutions. It can be treatment in a hospital, getting an education, raising a child in a kindergarten, and so on.

Economists distinguish between nominal and real income.

Under the nominal income means the total amount of cash receipts for a certain period. It is also important to remember that nominal incomes are calculated excluding taxes.

Why then introduce the term "real income"? How is real income different from nominal income?

The fact is that in different periods of time a person can receive the same nominal income, but on this income he can afford a different amount of goods and services. In simple terms, the real income of the population is a set of cash receipts, taking into account certain factors that affect the amount of goods and services that can be purchased for these incomes.

The following factors influence the level of real income:

1. Price index. Due to inflation, every year there is a depreciation of money, which leads to a decrease in the amount of goods and services that a person can buy for a fixed amount of money.
2. The level of taxes. Every month, most citizens of the Russian Federation make tax deductions to the regional and federal budgets, but the tax rate may change. Therefore, due to an increase or decrease in taxes, the amount of money that a person actually receives in his hands after paying all payments to the budget can change.
3. Payment for required services. Basically, utilities fall into this group.

You also need to understand that often these factors directly affect each other.

For example, when taxes are raised, many entrepreneurs will raise the prices of their goods and services in order not to go bankrupt. This will lead to higher prices, which will significantly affect the amount of goods and services that a person can purchase for a fixed wage.

Another example is tax cuts. The fact is that nominal income means the total amount of money excluding taxes. When the tax rate is lowered, a person will receive a larger amount in his hands. The difference will allow the purchase of additional goods and services, that is, in fact, real incomes will increase with tax cuts.

Remember that the real income of the population is always less than the nominal income at a fixed level of profit, since in all modern states there is a depreciation of money due to inflation.

Conclusion

Now let's sum up the above.

The total amount of goods, services and money that a person receives over a certain period is called income. Income is formed both at the expense of cash receipts that a person stores or spends on certain goods and services, and at the expense of natural goods. Another source of income is various free services provided by the state.

The purely monetary part of income is called nominal income. Nominal income is calculated excluding tax deductions to the budget.

Economics argues that for a fixed amount of money at different times you can buy a different amount of the same goods and services. This is due to inflation and changes in the tax burden.

To emphasize this feature, economists coined the term "real income". Real incomes are nominal incomes taking into account the price index and tax deductions.

When comparing living standards, many journalists often only compare salaries. However, such a comparison will not be very correct, since both salaries and the level of prices for goods and services can change at different times. To avoid this shortcoming, it is necessary to pay attention to the growth of real wages, since they more correctly reflect the well-being of the population.

This is the totality of all material resources that workers, employees and other persons receive for work in a particular area as a result of their economic activity or as transfers.

The essence of the concept

In a simpler form, we can say that income is the amount of money received in a certain unit of time for the performance of a certain work. For example, 20 thousand/month. Sources of income can be:

1. Salary (time and piece rate).
2. Other income of employees from enterprises in addition to wages: bonuses, remuneration, etc.
3. Income from entrepreneurial activities.
4. Income from the disposal of private property.
5. Income from the sale of another country's currency at a higher rate than the currency was purchased.
6. Other miscellaneous income.

Transfers

In addition to economic activities, income can come in the form of transfers. Let's explain this part in more detail.

Transfers are understood as the giving by one person of certain benefits to another for free. Also transfero translated as "move" or "carry". In this case, the transfer can be understood in a more general sense - a change in the location of funds in a certain form or only their owner.

For example, the state pays a pension to the elderly - this is a transfer. In addition, these incomes include:

1. Wealth. This category includes hereditary acquisitions: money, real and personal property, documents, etc.
2. Penalties.
3. Voluntary donations and contributions from individuals and legal entities.
4. Social benefits: unemployment benefits, single mothers, disabled people, funerals, child care, etc.
5. Social protection of the population (mandatory social insurance).

Population income level

For each country, the level of income of the population is important. It can be used to determine the welfare of the country with the greatest accuracy. Unlike per capita income, economists receive more detailed and truthful information, since indicators of average nominal, disposable and real income are used to assess the level of income:

1. Nominal - natural or monetary income received by a citizen of the country for a certain time for a certain job.

2. Disposable is nominal income minus mandatory payments to the state or private enterprises. Income that can be used by a citizen to meet needs.

3. Real - a certain amount of material goods (goods and services) that a citizen can purchase for the amount of real income for a certain time.

The term "income level of the population" is inviolably linked with the people's well-being, the degree of satisfaction of the spiritual and material needs of citizens. And most importantly, it is related to the standard of living of the population. So, for economists, the income indicators of the population have the following meanings:

• Comparison - comparison of the values ​​of individual indicators of income of citizens in a temporary or geographical (between different territories, between countries) interval.
• Studying the impact of social transformations (for better or for worse).
• Accounting for disparity in income between different segments of the population.

General form

Incomes are usually divided according to their type (form) and method of use. The population receives them in cash or in kind. The monetary form is wages, dividends, documents of value in the sale (the right to own private property, movable property). The natural form is expressed in one's own creation by households of objects necessary for life. For example, farmers grow carrots and potatoes (food) in their garden, or flax and cotton, which can be used to make clothes.

In-kind incomes of the population are produced and used by consumers. For example: this type is typical for farms, private plots, individual small towns and villages in any country. In-kind acquisitions should not be attributed only to countries with backward economies.

Monetary incomes of the population are used by citizens to purchase ready-made material needs. This is the purchase of necessary goods and services.

Real income

The real income of the population is a set of material goods, expressed in kind, that a consumer can acquire with his nominal income. Sometimes people confuse nominal and real income. Real earnings characterize the number of material goods purchased by a person, taking into account the variation in retail prices, tax percentages, etc.

To determine the real incomes of the population with the greatest accuracy, it is necessary to subtract the mandatory costs of paying direct and indirect taxes and mandatory payments from the total amount of all earnings (cash + natural). This refers to contributions, excise, VAT, overpayment for services, etc.

It is worth noting that the real income of the population is an indicator of the life of society in a given country. For example, capitalist relations are characterized by a rapid uneven growth of cash receipts and their sharp decline in certain periods. Such incomes of the population can suffer a decline for many reasons:

• Constant uncontrolled rise in prices for certain goods and services.
• Inflation (increase in the general price level).

During the formation of a social society, the general level of real incomes gradually increases. However, it is worth remembering that income is distributed unevenly. In particular, in Russia between 1940 and 1976, the income of farms and communities was much higher than that of the workers of any factory. But compared with the beginning of the 20th century, the total real income of the same workers increased by about 3.5 times. If we talk about the population as a whole, then almost 5 times.

Per capita income

According to entrepreneurs, income is the excess of the amounts from sales over the amounts needed for production costs. And production costs are considered not only the purchase of all necessary materials, but also the wages of workers, employees and managers. Thus, the average annual income of an individual in a country is per capita income. It is calculated based on the sum of all material assets for the year of persons of one class.

Per capita income was introduced into economic terms to indicate the wealth and economic position of a country. It can easily be used to determine the level of modernization and development of the country for any period of time.

An analysis of per capita income statistics in different countries of the world allows us to say with confidence that most of the world's population lives in countries with an average income that does not exceed $350.

However, per capita income gives too much of a big picture, does not consider individual details. For example, according to statistics, it is impossible to find out the purchasing power of different segments of the population by average incomes.

What about underdeveloped countries? The average European spends most of his income on providing for his life. These are clothes, food, rent, etc. But in underdeveloped countries, many people live on self-sufficiency (grow food, sew clothes, build housing) and, therefore, spend on it a little differently. This means that these points will not be reflected in the national income of an underdeveloped state.

And finally, per capita income statistics for a country cannot provide reliable information about the state of a country if it has a strong uneven distribution of income. It is about the contrast between the poor and the rich.

Nominal income

The simplest form of income - nominal income - represents the total amount of all income of an individual or enterprise from some activity. The nominal incomes of different segments of the population are formed according to certain patterns:

• Income in the form of wages, employees or income from property.
• Cash transfers from the state - transfers.
• Income generated through the financial credit system: government insurance, bank loans, etc.

Going back a few years, to the early 1990s, we can recall that at that time Russia had the lowest nominal incomes. According to the average statistics of Rosstat, monthly cash receipts did not exceed $22! Until about 1995, profitable conditions of extreme poverty persisted in Russia. But in 2006-2007, the Russian Federation again managed to return the economic situation of the population to the same level at which it was in 1990.

Population income

The country's economy rests unshakably on the income of each individual citizen. So, it is necessary to raise the standard of living to the highest possible. At the moment, the income of the population of Russia is distributed as follows:

1. Temporary and piecework payment - wages - 66.8%.
2. Social insurance payments - 18.2%.
3. Entrepreneurial income - 7.8%.
4. Disposal of property - 5.3%.
5. Income of other types - 1.9%.

The incomes of the population of European and CIS countries are distributed a little differently. In the West, many more people are engaged in entrepreneurial activities and fewer receive social insurance payments.

The highest level of income is noted in the countries of North America - Canada and the USA, as well as in Australia. The average monthly income of residents of these states reaches 3,000 dollars.

The lowest level is in Central and South Africa. There is no reliable information about the income of many territories, and in other states, the average salary hardly reaches $ 100. However, it is worth remembering that agricultural production reigns on this continent, but it is not taken into account in the calculation.

The growth of incomes of the population is the main task of the economy of any state. Each country at a certain point in its existence experienced strong economic crises, unrest in society due to lack of resources, etc. But the rulers of all territories of the Earth, without exception, strive to improve the life of the population and increase the average level of income.

How is income distributed?

The primary distribution of income, in economics it is also called functional, begins with their distribution among the owners of production factors. In different periods in different countries, different systems for the formation of income distribution have operated and are operating, but in general there are four main aspects:

1. Appointment by equalization, or egalitarian distribution, is an attempt to equalize the incomes of all segments of the population. However, this aspect cannot be considered successful. Since the physical and mental abilities of individuals in one country vary greatly, egalitarianization will give rise to a situation where one works and the other eats.
2. Distribution by market method. A more equitable way of distributing income based on the public benefit of the product produced and sold by the entrepreneur. So it is impossible to establish an absolute balance in income, but their distribution will be fair.
3. With the help of accumulated property. Such a distribution of incomes of the population is manifested in the receipt, accumulation and inheritance of any part of the accumulated property: houses, securities, money, etc.
4. Privileged distribution, most developed in countries with backward democracies. The simplest type of distribution, where wealthy officials and rulers autocratically redistribute income in their favor: they arrange higher salaries, pensions and other benefits.

Many people, living quietly within their own country, do not notice how the economic system guides them. And it is very good that an ordinary person does not notice how the state interferes in the market economy.

If the majority of people feel that incomes are distributed dishonestly, that someone is in charge of them, and that the own efforts of workers do not bear any fruit, this is fraught with discontent of the lower strata.

Population spending

If the citizens have incomes, the expenses of the population also take place. In well-developed countries, the income of any person should be greater than the costs. Then a full and progressive existence of each individual of society is possible. At the moment, in Russia, most of the population lives in this way. But it wasn't always.

In economics, there is such a thing as a decile coefficient, or stock coefficient, which characterizes the degree of stratification of society (the difference between the richest citizens and the poorest). When taken for ratios, the total income of 10% of all the richest citizens of the country and the poorest, this coefficient should not exceed 9-10 (according to UN recommendations).

In the early 90s, after the collapse of the USSR, the decile coefficient was officially equal to 16, but in fact its threshold reached a value of 28-32. This means that the incomes of the poor in Russia were more than 3 times lower than the subsistence level.

Such a difference between the earnings of the rich and the poor allows us to understand that not in the distant past, the economy of the Russian Federation experienced a real collapse and had to rise from the ruins.

Low incomes of the population threaten the country's economy with a state budget deficit. If the nominal income of an individual is less than the sum of the cost of the necessary material goods, then what can we say about the payment of direct and indirect taxes and the level of development of the state?

The main reason for low state revenues is the one-sidedness of demand. When only goods of one product are in demand on the market, and other producers store a product unsuitable for the masses, a two-sided situation arises. If you look at one angle, then the income of a sought-after producer will go up, but, on the other hand, this same reason is considered the main prerequisite for monopolies, due to which there is a strong contrast between the rich part of the population and the poor. In no case should this be allowed, therefore, the state monitors demand and supply in the market especially carefully.

Thus, one of the main tasks of the Ministries of Finance in Russia and their counterparts in other countries is to increase the subsistence minimum, the average wage and reduce the decile coefficient as much as possible.

Let now not all the aspirations of economists and ideologists can be implemented in practice, or at least draw up a project for their introduction to the masses. But if we compare the current standard of living and the one in which people were obliged to exist in the middle of the 20th century or even earlier, at the end of the 19th, then we can say with confidence that the economy of the leading countries of the world is progressing at an incredible speed. For example, after the collapse of the USSR, it took Russia about 10 years to return to the previous standard of living. Since then, our state has been progressing economically.

You should not confuse the different types of income of individuals, but you definitely need to know that each person is able to contribute to the development of the country's economy and help it rise to the top of the global economic industry.