Georgian Salaries Increased by GEL 24 Annually in the Last 5 Years

In the last five years, the average monthly nominal salary in Georgia has been increasing by an average of 62.6 GEL ($21.08) annually, and, given the overall level of inflation, the real wage has grown by an average of 24.6 GEL ($8.28).

To note, the average monthly salary in Georgia was 1068.3 GEL ($359.98/€327.99) in 2018, which is a 6.9% increase compared to the prior year, according to the latest data from the National Statistics Office of Georgia (Geostat).

The agency reports that in 2018, the average salary of women was 822.6 GEL ($277.18), while men had an average salary of 1,280.7 GEL ($431.55).

Last year, the average salary of employees in the public sector was 892.1 GEL ($300.6), while in the non-public sector it was 1164 GEL ($392.22).

We took a look at the average annual salary over the last five years:

2014 – GEL 818 ($275.41)

2015 - GEL 900.4 ($303.02)

2016 - GEL 940 ($316.49)

2017 - GEL 999 ($336.35)

2018 - GEL1068.3 ($359.98)

There is a lot of dissatisfaction in society about the average salary and the methodology for its calculation, with the salaries of most hired workers coming in at well below the average. The method for calculating the average wage is as follows: The sum of the salaries of all hired workers is divided by the number of all hired employees and the average salary is obtained. Obviously, here will be included the employee whose salary is conditionally GEL 1600 and the employee whose salary is GEL 300. Because of this, some economists believe that the average wage cannot provide an accurate and complete picture of the economic and social situation of the country.

These economic analysts further claim that for a more detailed characterization of the labor market, it is necessary to use statistical data such as Mode, Median and Mean. The mode is the most frequently occurring value in a set of values and is interesting as it can be used for any type of data, not just numbers. The ‘mean’ or ‘arithmetic mean’ is the most commonly used form of average. In order to calculate the mean average, a set of related numbers (or data set) is required. At least two numbers are needed in order to calculate the mean. The numbers need to be linked or related to each other in some way to have any meaningful result. To determine the Median, it is necessary to arrange the numbers in order and find the middle number.

The economists also say that in Georgia, the artificial raising of the price of services because the tariffs are higher in developed countries of Europe, it the wrong approach. In countries where service prices are high, there are high quality services and a high standard of living. The population has a high purchasing power and can afford this expensive service, unlike in Georgia, where amid the artificial increase of service prices, lower incomes and a lower standard of living, the population is less able to afford expensive services.

Geostat uses the arithmetic mean to calculate average monthly salaries, although the median method is better when the data is significantly different. The issue is that if only the salaries of the most highly paid people are raised, this does not affect the median salary, though it increases the mean salary.

Geostat receives salary data not from the Revenue Service of the Ministry of Finance (which records the income of citizens), but from an independent survey conducted by Geostat, which collects data from about 15,000 businesses and organizations in Georgia, including large corporations, government agencies, insurance companies, banks and credit unions.

Regarding 2019, Geostat data reads that the average monthly salary increased by 33.5 GEL (about $12.23) year-on-year and reached 1,092.7 GEL (about $398.80) in the first quarter of the year.

In the same period, men earned almost 418 GEL (about $152.55) more than women each month in Q1 of 2019. Female workers earned an average salary of 876.1 GEL (+58 GEL) per month, while male workers earned 1,294.1 GEL (+22.4 GEL).

As of 2018, the Top 10 European countries with the highest salaries (net salary, after tax) are:

1. Denmark - €3270;

2. Luxembourg - €3159;

3. Sweden - €2570;

4. Finland - €2509;

5. Ireland - €2479;

6. Austria - €2324;

7. Germany - €2270

8. France - €2225

9. Netherlands - €2155

10. Great Britain - €1990

By Tea Mariamidze

Image source: sentinelassam.com