People that like to be poor

11:40, 08 November 2012
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While by European standards Ukraine seems to be a normal country only in terms of its unemployment rates, it is rather odd why Ukrainians are satisfied with low salaries, according to KW. A KW article tries to find the answer.

Ukraine does not look good in some stats. According to the World Bank, Moldova ranks last by GDP in Europe (US $1,967 per person in 2011) and Ukraine is in next to last place at US $3,615. Luxembourg, which surpassed Ukraine by 31.8 times, tops the charts with a GDP indicator of US $115,038. Portugal, at US $22,330 at head, is ahead of Ukraine by 6.2 times.

The poorest among the wealthiest countries is Greece at US $26,948 (Slovenia is rated higher) and the Czech Republic is the wealthiest among the poorest at US $26,046 (Portugal is ranked lower). Ukraine lags behind the Czech Republic by 3.6 times and Luxembourg by 12.4 times. While the gap is not that alarming if not to factor in the PPP index, it is still quite significant.

Official employment in Ukraine looks much better by European standards. The unemployment level, evaluated using the methodology of the International Labor Organization, is just 7.9%, putting it in a tie with Cyprus 18th places. The lowest unemployment level was registered in Belarus at 0.6%, while Norway ranks second at 3.3% and Switzerland third at 4%. The highest unemployment rate was registered in the former Yugoslavian republics – Macedonia (31.4%), Bosnia and Herzegovina (27.6%) and Serbia (23%). Nevertheless, even with such high unemployment rates people’s salaries in those countries are higher than those of Ukrainians (whether factoring in the PPP index or not).

Of course, employment figures and salary levels raise certain doubts. On the one hand, part-time jobs are not taken into consideration in the process of estimating unemployment rates. On the other hand, there are illegal salaries or parts of salaries. But this is also the case in other countries. For this reason, from the European vantage point salaries in Ukraine are an enigma, the article by Yuriy Berezenko concludes.

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