Ukraine is second last in Europe in terms of per capita purchasing power. This information has been recently made public by the German office of the international sociological research company Gfk in its annual research Gfk Purchasing Power Europe. After deducting taxes and social payments, the average Europeans purchasing power, according to the abovementioned study, is 11,945 euros per year. An average Ukrainian has about a third of that level.
The German sociologists found out that an average Ukrainian makes about 300-350 euros per month (roughly 3,000-3,500 hryvnias in the national currency). However, the State Statistics Committee claims that an average Ukrainian’s income, in the first half of 2010, was about 2,110 hryvnias [the disparity stems from the fact that purchasing power takes into account the varying prices of commodities in different countries, thus obtaining an internationally comparable measure – Ed.]
According to the central statistics body, 48.6 percent of Ukrainians have an average income of 840 to 1,560 hryvnias per month. Only eight percent have incomes between 1,500 and 2,000 hryvnias, and only 7.1 percent of “lucky ones” make over 2,000. A third of Ukrainians, including pensioners and children, are in fact living below the poverty line, with an income of less than 840 hryvnias per month.
However, as Liudmyla Cherenko, head of the department of living standards research at the Institute for Demography and Social Studies, National Academy of Sciences of Ukraine, told The Day, the subjective poverty index is even higher. According to the recent information of the State Statistics Committee, 96 percent of Ukrainians consider themselves as not being well-off. “Sociologists asked a respondent: how would you refer yourself to? Fifty-six percent referred to themselves as being ‘poor,’ and 40 percent as ‘not poor but still not middle class’” said Cherenko.
The expert explains such a pessimistic sentiment by the specific Ukrainian mentality. “Perhaps, it’s our nature — comparing ourselves not with friends or neighbors, but with Akhmetov, Kolomoisky, Firtash and so on. Or with colleagues from the US or Europe,” says Cherenko. “Certainly, it is clear that in a poor country like ours a doctor or a teacher cannot earn more or even as much as in a wealthy country.” However, unrealistic comparisons are not the only reason for Ukrainians’ pessimistic assessment of their status. Numerous elections also played a trick. “Politicians of all kinds campaigned on poverty. ‘You see how miserable your life is, but in fact, your life is even worse than you think!’ Such statements were heard from everywhere,” says Cherenko. “So we were manipulated, they made us think we are the worst in the world.”
“Someone made our population believe that not only in Western countries but also in Russia people live much better than we do. This mismatch of high, inaccessibly high for us, living standards with our own possibilities generates discontent,” agrees Ella Libanova, director of Institute for Demography and Social Studies, the National Academy of Sciences of Ukraine.
At this, Libanova stresses that the average Ukrainian wants to reach the level of consumption close to that seen in Western democracies, but at the same time they shift a big share of their own everyday problems on the state. “They want to go to Europe, watch Hollywood movies, read Western literature, have no censorship, and at the same time they want the state to ensure a high living standard for them. About a third of Ukrainians think this way,” states the sociologist. However, there is still some objectivity in Ukrainians’ assessment of their wallets. It is especially noticeable on the market, in stores. Since, according to the State Statistics Committee, Ukrainians spend 50 percent of their income on food. At this, according to European standards, citi-zens who spend less than 20 percent of their monthly budget on food can be considered well-off. No wonder the German sociologists made such conclusions about the purchasing power of Ukrainians. “Our income does not correspond to the level of our prices,” Cherenko explains.
“Common sense dictates that if Ukrainians earn little, they should also pay little for goods,” adds Cherenko. “But in this case we have a misbalance between the salary levels and prices.” The expert points out that it is difficult to explain this illogical situation. In addition to economic factors, such as the prevalence of imported products, Cherenko mentions traditional corruption, “kickbacks,” and bribes. However, despite the fact that Ukraine takes the second last place in the ranking, Ukrainians belong to the five first European countries according to sales of expensive cars, according to Business Analytics. And this year five Ukrainian billionaires once again reached the list of the richest people in the world, compiled by the American magazine Forbes.
But it is not the average Ukrainian that buys fancy cars. Hanna Vakhitova, expert at the Kyiv School of Economics, pointed out to The Day that although the level of the hidden income in Ukraine influences the accuracy of estimates of the international research company, it doesn’t change the results considerably. “If we compare the average purchasing power of a Ukrainian, which constitutes less than a third of 11,945 euros, it becomes clear we do not earn so much,” argues the expert.