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The Ministry of Finance Suggested Variant of Struggle with Poverty – to Consider Poor Rich

The Ministry of Finance Suggested Variant of Struggle with Poverty – to Consider Poor Rich
30.05.2012

The Ministry of Finance of the Russian Federation suggested introduction of cardinally new approaches to determination of a size of a living wage and technique of its calculation. Introduction of so-called “social level of poverty” which will appear below present living wage as it will be calculated with consideration of the effect of economy from all-family consumption is the main innovation. In other words, the bigger the family, the less should be its average income per capita as there’s an effect of joint consumption of benefits having all-family character.

Proceeding from this “social level of poverty” the Ministry of Finance also suggests to carry out categorical aid of families.

In different countries the term "poverty" defined different phenomena, the Ministry of Finance notes. Several methods are applied to determinate poverty borders, statistical (ratio of incomes to the average income per capita or to incomes of needy categories of the population) and standard (ratio of income to the size of a living wage on the basis of a consumer basket) are the main.

In Russia the living wage is calculated by standard method on the basis of consumer basket. However the Ministry of Finance considers as a priority task not specification of standards of the present basket, but new approaches to determination of the size of living wage and technique of its calculation, is stated in the letter. It will allow to establish different lines of poverty which identify forms of its manifestation better.

According to the current legislation, the living wage as a whole across Russia is used in the development and realization of social policy and federal social programs, for objectivation of minimum statutory monthly pay, for determination of sizes of scholarship, grants and other social payments, for formation of the federal budget.

Population with the monetary income lower, than the size of living wage in the Russian Federation, according to the Russian Federal Service of State Statistics, in 2011 grew to 18,1 million people from 17,9 million people in 2010. Poverty level (percent from a total number of the population) in the Russian Federation in 2011 increased to 12,8% from 12,6% in 2010.

A number of the poor grew for the first time since 2008 — then it increased to 18,8 million people (poverty level — 13,4%) from 18,7 million people in 2007 (13,3%) and in 2009 it decreased to 18,2 million people (13%). The living wage in 2011 on the average per capita in the I quarter made 6473 rubles, in the II quarter — 6505 rubles, in the III quarter — 6287 rubles, in the IV quarter — 6209 rubles.

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From editorial board: In due time Mikhail Delyagin wrote that vast majority of the population in Russia is poor from the point of view of the European understanding of the term. What is called in Russia poverty is beggary.

For example, average salary well-known now "UralVagonZavod" is something about 25 thousand, in any case it doesn't reach 30. Having such salary local workers, as they say, are ready to go to Moscow to oppress dissatisfied – probably, it means that they are satisfied. While in Europe it’s equal to the perish relief.

Our level of poverty - 6,5 thousand rubles, 200 dollars. It’s not beggary, it’s "honest poverty", that is it’s necessary to work for these 200 dollars. For 200 trips by Moscow Metro. For 20 trips by "Aeroexpress" from a railway station to the airport. For 1 time travelling from Moscow to Petersburg by "Sapsan" in the first class.

But inevitable decrease in the standard of living owing to the objective and subjective reasons puts new task before the government - and it finds excellent decision. It is necessary not to raise standard of living, but to lower poverty level. Ingeniously! Poor 200 dollars for which some Arab in Paris - unemployed in the third generation - will be too lazy even to go into the neighbouring аrrondissement, it appears it’s necessary to consider in the context of the general values. That is if you get 200 dollars monthly, you are poor, while if you have 200 for three people and consequently general toilet and TV, you are already quite well-fixed.

In some countries in the Middle Ages when brothers had no means to marry, the senior brother took wife, while they had to live, so to speak, by one family. Very productive idea for the Ministry of Finance of the Russian Federation.

Аnatoly Baranov

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