The cost of living is an important economic indicator. It reflects how much a person will need for a month to meet basic needs. The concept of a living wage is connected with the concept of a consumer basket and directly depends on this value.
The principle of calculating the cost of living
Living wage - an indicator determined by the value of the consumer basket, which includes goods and services necessary for a person to meet basic needs.
The principle of calculating this value is somewhat arbitrary, since the cost of the food basket is taken in average terms. Moreover, this calculation does not take into account the individual characteristics of human consumption. For example, a basket of a person with diabetes is different from products that people without chronic diseases buy.
To determine the cost of a food basket in the Chelyabinsk region, the region’s average price for basic food products (potatoes, fruits, meat, eggs) is taken and multiplied by the number of product units that a person will need during the year. Then the resulting value is divided into 12 months.
In addition to food products, the consumer basket includes:
- communal payments;
- non-grocery goods;
- other services.
The cost of the above categories is calculated very simply - it is taken for 50% of the cost of the food part of the basket.
When calculating the minimum living wage in the Chelyabinsk region, the following goods and services are not taken into account:
- rent apartment;
- the cost of gasoline;
- educational services (fees for kindergarten, school).
Recalculation of a living wage in the Chelyabinsk region usually happens once a quarter.
Consumer basket composition
All products included in the basket are divided into three categories:
- food;
- non-food;
- services.
Food products include bread and bakery products, dairy products, meat, eggs, oils and fats, fish products, sugar and confectionery products in terms of sugar, spices, salt, tea and potatoes.
The non-food category includes clothing and shoes, underwear, hosiery, school and writing materials, household goods, basic sanitary supplies and basic medicines.
Services are understood as payments for housing and communal services, transport and leisure expenses.
Differences for different categories of citizens
The cost of living is not an absolute indicator. Its size may vary for different regions, as well as for different groups of individuals within the same economic zone. So, pensioners, schoolchildren and working citizens are supposed to have an excellent living wage. In the Chelyabinsk region, the difference between the consumer baskets of the able-bodied population and dependents is almost two thousand rubles. This value can vary from region to region.
