The living wage is not just a conditional amount that is necessary for normal life. Based on this amount, the minimum wage, minimum pension and social benefits are determined. It is calculated for three categories of citizens separately - the working population, children and pensioners.

The cost of living is calculated based on the cost of the composition of the consumer basket. In each region, its amount may be changed, taking into account the economic situation and the specifics of the region.

Recently, the cost of living has been changing since the beginning of the year (although, by law, it must be recalculated quarterly) and this has been largely helped by a new approach to the composition of the consumer basket. Products become more expensive, the consumer basket becomes more expensive and, accordingly, the cost of living increases.

But as always, everything is somehow different with us compared to others. Food prices in Russia are raised throughout the year. At the end of the fourth quarter, the cost of the consumer basket is recalculated and a living wage is established. This amount will be valid for all 12 months, but products continue to rise in price.

Thus, not only does the consumer basket include only the extremely necessary composition, it goes ahead from the subsistence level. So, already in March-April, the increase in pensions, minimum wage and all social payments and subsidies becomes unnoticeable.

The cost of living in Russia in 2014

However, the next indexation took place, and in 2014 the minimum subsistence level is 8,200 rubles for the working population. For pensioners it is 6354, and for children – 6636 rubles.

The cost of living in Russia (LM) is a value that is used to assess the standard of living in the country. The quality of life of people also depends on the indicator, because the PM determines the minimum wage and the amount of social payments, subsidies, pensions, and scholarships. The statistical indicator is calculated based on the price of products that make up the consumer basket (CB), food and non-food products, and payment for services. Every year the cost of living in Russia is increased at least to the inflation rate in order to maintain the standard of living of the population.

Determination of the cost of living

There are several methods for determining the minimum standard of living in a country:

1. Statistical method. The living wage is set at the income level of about 10-20% of the least wealthy people. In this way, the coefficient can be determined in high-income countries.
2. Sociological method. The indicator is determined in the process of conducting a social survey of citizens. This method is more advisory, since subjective opinions are not supported by the real facts of the financial situation of the country's residents, but identify the needs of people.
3. Resource method. The minimum living wage in Russia, as a rule, is not determined by this method: based on the real economic capabilities of the country, according to how much the state is able to provide for citizens.
4. Combined method. Combines several methods. According to this method, the cost of food products is calculated according to standards, non-food products - as a percentage of total costs, and utilities - in fact.
5. Normative- this is a method of forming a living wage based on the consumer basket. In each country, the PC is formed depending on the needs of the people. This is the most common method for determining the cost of living.
6. Relative method. It is used in countries with well-developed market economies, where 50% of citizens have an income above the subsistence level, and the remaining 50% have less available funds.

Methods for calculating the cost of living

The basic rules for calculating the cost of living include the following principles:

1. Cost of PC of the main social groups of citizens.
2. Planned spending of the population on taxes and services.
3. The value of PM for the main social groups of citizens and per capita.

1. Social: wages and productivity (increased wages and pensions raise the bar on the cost of living).
2. Legal: maintaining human rights in accordance with the Covenant on Economic, Social and Cultural Rights, which states that every citizen has the right and should be able to earn a living.
3. Economic: form the legal and organizational foundations of a market economy, democratization of labor relations, ways to replenish budget revenues.

Setting a living wage

The living wage in Russia is set to determine the standard of living of people in the development and implementation of social programs, for the formation of the state budget, determining the minimum level of pensions, salaries, benefits and scholarships, as well as other types of social assistance to needy citizens.

Thus, the minimum cost of living in 2014 (Russia) was 7,688 rubles per capita at the beginning of the calendar year and 8,234 at the end.

Consumer basket in Russia

A consumer basket is an approximate calculation of food and non-food goods, services for a month or a year, to ensure a minimum level of consumption for one person or for the whole family. A PC is needed to calculate the consumer price index. This calculation is more realistic, since real prices are used. Using the consumer basket, it is possible to analyze the integration of prices in different regions of the country.

The Russian consumer basket includes the following food products (per person per year):

1. Bread products (bread, pasta, flour, cereals, legumes): 126.5 kg - for workers; 98.2 kg - for pensioners; 77.6 kg - for children under 15 years of age.
2. Potatoes: workers - 100.4 kg; pensioners - 80 kg; minors - 88.1 kg.
3. Vegetables: workers - 114.6 kg; pensioners - 98 kg; minors - 112.6 kg.
4. Confectionery and sugar: workers - 23.8 kg; pensioners - 21.2 kg; minors - 21.8 kg.
5. Meat products: workers - 58.6 kg; pensioners - 54 kg; minors - 44 kg.
6. Fish products: workers - 18.5 kg; pensioners - 16.0 kg; minors - 18.6 kg.
7. Dairy products: workers - 290 kg; pensioners - 257.8 kg; minors - 360.7 kg.
8. Eggs: for workers - 210 pcs.; pensioners - 200 pcs.; children - 201 pcs.
9. Vegetable food products (oil and other fats): for workers - 11 kg; pensioners - 10 kg; minors - 5 kg.

The percentage of the cost of non-food goods and services is equal to 50% of the cost of food.

Average cost of living

For January, February, March, the cost of living in 2014 in Russia was (in rubles):

• per capita - 7688;
• for people of working age - 8283;
• for retired people - 6308;
• for children - 7452.

For April, May, June 2014, the cost of living in Russia (in rubles) was:

• per capita - 8192;
• for people of working age - 8834;
• for retired people - 6717;
• for children - 7920.

For July, August, September (in rubles):

• per capita - 8086;
• for people of working age - 8731;
• for retired people - 6656;
• for children - 7738.

For October, November, December 2014, the cost of living in 2014 in Russia was (in rubles):

• per capita - 8234;
• for people of working age - 8885;
• for retired people - 678;
• for children - 7899.

Living wage for the working population by region of the Russian Federation

In 2014, the lowest level of living wage was (in rubles):

1. The Sevastopol region showed the lowest income for the 2nd (4628.4) and 3rd (6303) quarters.
2. The Penza region showed the lowest cost of living in Russia in the 1st quarter of 2014 (6,763 rubles per person).

The highest monthly wage for able-bodied people in 2014 was observed in the Nenets Autonomous Okrug (in the first three months the figure was 16,940, in the last three months - 17,307).

Living wage for pensioners by regions of the Russian Federation

The lowest cost of living in Russia in 2014 for retired people (in rubles) was registered in the following subjects:

1. Sevastopol showed the lowest PM level in the 2nd and 3rd quarters (in the 2nd quarter it was 3606.2, in the 3rd quarter it was 4841).
2. Astrakhan region (5274).
3. Penza region (5202).
4. Tambov region (5091).

The highest cost of living for retired people (in rubles):

1. The Nenets Autonomous Okrug for the entire 2014 has the highest cost of living (in the 1st quarter the value was 13,219, in the 2nd quarter - 13,498, in the 3rd quarter - 13,540, in the 4th - 13,492)
2. The Kamchatka Territory in the 3rd (12,647) and 4th (12,674) quarters has quite good indicators.

Living wage for children by regions of the Russian Federation

Minimum cost of living in Russia for children for 2014 (in rubles):

1. The Chechen Republic ranks lowest in terms of living standards for children in 2014. In January, February, March, the PM was 6008. In April, May, June - 5826, July, August, September - 5900, and in October, November, December - 5949.
2. The Tambov region showed the lowest cost of living in the Russian Federation in the 1st quarter (the figure was 5904).
3. Sevastopol PM for the second quarter showed 4886.8.

The highest cost of living for children for 2014 (in rubles) was registered in the following regions:

1. The Nenets Autonomous Okrug for 2014 had the highest PM indicator (in the 1st quarter - 17,440, in the 2nd quarter - 17,781, in the 3rd quarter - 17,817, in the 4th - 17,790).
2. Kamchatka Territory (in the 3rd quarter the cost of living was 16,667, in the 4th quarter it was 16,693).

Dynamics of changes in the cost of living

The Government of the Russian Federation annually increases the level of the minimum subsistence level. This allows us to balance inflation, lack of wage growth, economic crisis, sanctions policy and high food costs with the standard of living of the population.

Thus, the cost of living in Russia for the last two autumn months and December 2016 in rubles was 9,691 per capita, 10,466 for able-bodied citizens. 9434 was allocated to minors and 8000 pensioners. The value was slightly lower in the previous year: the cost of living in Russia for the same period in 2015 (in rubles) was 9,452 per capita, 10,187 for able-bodied citizens, 7,781 for residents of retirement age and 9,197 for children.

It is a very important indicator taken into account when calculating all social payments and benefits. Since its value depends on the level of consumer prices, it is revised quarterly for each of 3 separate categories of the population: able-bodied citizens, pensioners and children. In addition, each subject of the Russian Federation sets its own subsistence level, depending on the level of consumer prices in a particular region.

In the 2nd quarter of 2013, the cost of living in Russia as a whole amounted to 7,372 rubles, including for able-bodied citizens - 7,941 rubles, pensioners - 6,043 rubles, children - 7,104 rubles.

How much will the cost of living increase in Russia in 2014?

According to the Ministry of Economic Development, the cost of living in 2014 will increase by approximately 6% and will amount to 8,200 rubles for the country as a whole. However, this figure may be revised if the level is more than the expected 5%.

For the first quarter of 2014, the Russian Government increased the cost of living by 362 rubles and, compared to the fourth quarter of 2013, the cost of living increased by 5.1%. At the same time, the average cost of living for the working population in the future will be 8,283 rubles, for pensioners – 6,308 rubles, for children – 7,452 rubles.

Living wage- the minimum amount necessary for life. This amount includes food, essential non-food products, services, mandatory payments and fees.

Why do we need a living wage?

Nobody suggests living on a subsistence level, and it’s impossible. The cost of living does not include many important things. Living wage used by government to evaluate and compare economic and social phenomena. In particular it is used for:

• formation of federal and regional budgets;
• establishing minimum wages;
• assessments of living standards throughout the country and in the regions;
• determining the amount of social benefits, scholarships, benefits, etc.
• When determining the living wage, the entire population is divided into three categories:
• able-bodied people;
• pensioners;
• children.

For these groups of people, the cost of living varies. The highest minimum is for the working population, the lowest is for pensioners. The average indicator is also calculated - minimum per capita.

The minimum subsistence level is adopted by law for the country as a whole and for each region separately. The cost of living is revised quarterly, taking into account the increase in the cost of products, other goods and services. In recent years, the cost of living has increased by an average of 4-5% per quarter.

The cost of living is set every quarter centrally throughout the country and in each region independently. In the 1st quarter of 2014, the minimum required for life per capita was 7,688 rubles. For the main part of the population, this value is 8,283 rubles, for pensioners – 6,308 rubles, for children – 7,452 rubles.

Living wage 2014 in the regions

In each region of the country, the government calculates its own cost of living quarterly.

Traditionally, one of the highest levels of living wages in the capital. For the 2nd quarter of 2014, this value in Moscow was set at 11,861 rubles. In St. Petersburg the level is much lower - 7913 rubles.

The lowest level of living wage is in the Tambov region, where it is 6,123 rubles. The figures are also low in the Belgorod, Penza and Saratov regions.

The highest is in the Nenets Autonomous Okrug, where the minimum is 16,250 rubles. Also, a high cost of living is established in the Kamchatka region, Yakutia, and Magadan region.