{"id":53125,"date":"2023-12-04T13:22:16","date_gmt":"2023-12-04T10:22:16","guid":{"rendered":"https:\/\/api.pozirk.online\/?post_type=longreads&#038;p=53125"},"modified":"2023-12-04T13:27:33","modified_gmt":"2023-12-04T10:27:33","slug":"average-monthly-pay-up-to-600-but-risk-of-inflation-looms","status":"publish","type":"longreads","link":"https:\/\/pozirk.online\/en\/longreads\/53125\/","title":{"rendered":"Average monthly pay up to $600, but risk of inflation looms"},"content":{"rendered":"\n<p><em>By Ale\u015b Hudzija<\/em><\/p>\n\n\n\n<figure class=\"block-image block-image-normal\">\n\n    <img decoding=\"async\" width=\"1440\" height=\"600\" src=\"https:\/\/pozirk.online\/wp-content\/uploads\/2023\/12\/banner_dollar_pexels-engin-akyurt-10149611.jpg\" class=\"attachment-full size-full\" alt=\"\" srcset=\"https:\/\/pozirk.online\/wp-content\/uploads\/2023\/12\/banner_dollar_pexels-engin-akyurt-10149611.jpg 1440w, https:\/\/pozirk.online\/wp-content\/uploads\/2023\/12\/banner_dollar_pexels-engin-akyurt-10149611-300x125.jpg 300w, https:\/\/pozirk.online\/wp-content\/uploads\/2023\/12\/banner_dollar_pexels-engin-akyurt-10149611-1024x427.jpg 1024w, https:\/\/pozirk.online\/wp-content\/uploads\/2023\/12\/banner_dollar_pexels-engin-akyurt-10149611-768x320.jpg 768w\" sizes=\"(max-width: 1440px) 100vw, 1440px\" \/>\n    <figcaption>\n        \n                    <div class=\"block-image__author\">\n                                <span>(pexels.com \/ Engin Akyurt)<\/span>\n            <\/div>\n            <\/figcaption>\n<\/figure>\n\n\n\n<p><strong>Since March 2021, despite Western sanctions, foreign trade imbalances and a shrinking labor market, Belarus\u2019 average nominal monthly pay has risen steadily from the equivalent of $500 to 1,971 rubels ($600) in October.<\/strong><\/p>\n\n\n\n<p>However, this does not signify a triumph of the Belarusian social model over market laws.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Belarusians count their money in US dollars<\/strong><\/h2>\n\n\n\n<p>Naturally, Belarusians are concerned about incomes, prices and employment. Since 2020, wages in the country have not fallen, but reached new historical highs, contrary to the expectations of many ordinary people and experts.<\/p>\n\n\n\n<p>The propaganda narrative that &#8220;sanctions only make us stronger&#8221; has nothing to do with it, and it would be too simplistic to say that this is down to the central bank printing more money.<\/p>\n\n\n\n<p>According to government statistics, wages are rising in the national currency. This has never surprised Belarusians, who understand how higher prices affect their purchasing power. That is why people usually convert their salaries into US dollars. Few people can remember how much they earned in Belarusian rubels five or ten years ago, but almost everyone knows how much it was in US dollars.<\/p>\n\n\n\n<p>High inflation forced Belarusians to count in dollars. It is much more common to use foreign currency to determine the cost of a car, a square meter of housing, or a summer vacation. National Statistics Committee employees and other officials also understand it, so they also use real pay adjusted for inflation.<\/p>\n\n\n\n<p>In fact, they use at least three indicators to measure income: nominal pay, real pay and wage in dollars.<\/p>\n\n\n\n<p><strong>Average pay in Belarus<\/strong><\/p>\n\n\n\n<p>Nominal, Real, $ equivalent<\/p>\n\n\n\n<figure class=\"wp-block-embed\"><div class=\"wp-block-embed__wrapper\">\n<iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" title=\"Interactive or visual content\" src=\"https:\/\/flo.uri.sh\/visualisation\/15936005\/embed#?secret=ET5iUktiuc\" data-secret=\"ET5iUktiuc\" frameborder=\"0\" scrolling=\"no\" height=\"575\" width=\"500\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Nominal pay is in Belarusian rubels (tens of thousands of rubels before 2016); real pay, as percentage of the previous year\u2019s level<\/p>\n\n\n\n<p>Looking at wages, one can see that in a relatively short period Belarusians can suddenly become richer or drastically poorer. At the moment, incomes in the country are higher than ever before. However, there are certain points to consider.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why are wages rising?<\/strong><\/h2>\n\n\n\n<p>Average nominal pay has little to do with reality.<\/p>\n\n\n\n<p>First of all, like the average temperature of patients at hospital, average pay is vulnerable to manipulation. Both officials and businesspeople know how to achieve pay targets without paying more.<\/p>\n\n\n\n<p>Second, nominal pay includes income tax and social security contributions, as well as union dues and other deductions.<\/p>\n\n\n\n<p>In addition, earnings vary significantly both by region and by occupation. For example, salaries in Minsk are 1.5-2 times higher than in the provinces, and salaries in the IT sector, the highest-paid sector of the economy, are 5-7 times higher than the salaries of teachers.<\/p>\n\n\n\n<p>Both the government and businesses are taking steps that contributed to the unprecedented pay rise. For the government, pay has always been of paramount importance as proof that the chosen economic strategy is correct. It has more to do with populism than with economic imperatives.<\/p>\n\n\n\n<p>This is not the case for businesses. They are trying to raise wages to attract or retain workers as labor market shrinks.<\/p>\n\n\n\n<p>Wages are driven by supply and demand in the labor market, and also non-market factors, such as cheap loans extended to state-owned enterprises, often inefficient ones.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Economy overheated<\/strong><\/h2>\n\n\n\n<p>Amid a clearly overheated economic recovery, Western sanctions and high uncertainty in the markets, it will be quite difficult to keep wages high in the long run.<\/p>\n\n\n\n<p>In the public sector, direct dependence on Moscow is becoming increasingly evident. To date, Russia continues to support the Belarusian economy both directly, through loans, and indirectly by facilitating market access and transit of Belarusian goods to third countries. Such support may help the Belarusian economy grow, or slow down its decline to prevent social unrest.<\/p>\n\n\n\n<p>However, it makes the economy extremely vulnerable. If Moscow cuts aid, for example, refuses to refinance Belarus&#8217; debts or poses obstacles to the re-export of its goods, the Belarusian economy may immediately collapse. The country will not be able to redirect trade to the West without suffering economic and political shocks.<\/p>\n\n\n\n<p>The private sector&#8217;s ability to maintain current pay levels is also limited. It is under pressure from government price controls and high taxes. Businesses can survive profit reduction for a while, but it is hard to survive in an adverse market environment for long. Of course, some companies are more resilient than others, but the economy cannot function that way.<\/p>\n\n\n\n<p>The most obvious forecast is that an acceleration of inflation will reduce the purchasing power of wages. The Belarusian currency is likely to depreciate, and the dollar equivalent of wages will also fall.<\/p>\n\n\n\n<p>It is important to note that the dollar is also subject to inflation. What could be bought for $500 in 2010 will cost $705 in 2023, so Alaksandar \u0141uka\u0161enka&#8217;s famous promise of &#8220;five hundred dollars for everyone&#8221; has already lost its appeal.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Ale\u015b Hudzija Since March 2021, despite Western sanctions, foreign trade imbalances and a shrinking labor market, Belarus\u2019 average nominal monthly pay has risen steadily from the equivalent of $500 to 1,971 rubels ($600) in October. However, this does not signify a triumph of the Belarusian social model over market laws. Belarusians count their money [&hellip;]<\/p>\n","protected":false},"author":46,"featured_media":52605,"template":"","rubric":[21,24],"class_list":["post-53125","longreads","type-longreads","status-publish","has-post-thumbnail","hentry","rubric-economy","rubric-theviewer"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Average monthly pay up to $600, but risk of inflation looms | Pozirk<\/title>\n<meta name=\"description\" content=\"By Ale\u015b Hudzija Since March 2021, despite Western sanctions, foreign trade imbalances and a shrinking labor market, Belarus\u2019 average nominal monthly pay\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/pozirk.online\/en\/longreads\/53125\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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