Russians and Ukrainians suffer as inflation outstrips wage growth

Russians and Ukrainians suffer as inflation outstrips wage growth
By Henry Kirby December 18, 2015

Ukraine’s annual wage growth has been in double-digits for all but one month this year. This would normally be cause for celebration, but October’s massive year-on-year wage rise of 29% will feel more like a 17% decrease for most people, as rocketing inflation continues to make staple goods increasingly unaffordable.

Price increases are outpacing wage growth in Russia too, where double-digit consumer price rises show no meaningful signs of slowing any time soon. In sanctions-hit Russia, unlike Ukraine, wages are actually falling.

The measure of wage growth minus inflation is a crude way of looking at what is often recorded as real wage growth, but allows us to gauge how affordable or unaffordable it is to live and work in a given country.

The grim situations of Russia and Ukraine reflected in the bne:Chart could actually be worse still if median rather than average wage growth is used, as average wages are often unrepresentatively high due to high-earning outliers.

 

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