Income of the population is the sum of material goods and cash generated or received for a certain period of time. The role of income is that the level of consumption directly depends on the size of it.
Cash income includes all financial income in the form of wages, business income, various benefits, pensions, scholarships, property, interest on deposits, annuities, dividends, profits from the sale of securities, services rendered and so on.
The level of income is an important indicator of the well-being of members of society, since it determines the possibilities of the spiritual and material life of an individual: getting a good education, relaxation, meeting needs, maintaining health.
To analyze the level of income and their dynamics, such indicators as nominal, real and disposable income are used. Let's consider them in more detail.
Nominal income is the absolute amount of cash income, assigned pensions, accrued salaries, expressed in actual prices.
Disposable income is the amount that can be used for personal savings and consumption. To measure the dynamics, an indicator of real disposable income is used, which is calculated taking into account the price index. Thus, if you want to calculate disposable income, the formula looks like this: disposable income = nominal income - taxes - mandatory payments.
Real incomes include the amount of services and goods that a consumer will be able to purchase within a certain time for disposable income. In other words, adjusted for the dynamics of the price level, that is, the quotient of dividing disposable income by the consumer price index.
There is also another definition of the concept, according to which it is understood as part of the national income, designed to meet the needs of the population and created in the production process. Thus, the gross national disposable income must compensate for labor costs, that is, all the mental and physical abilities of the population that were used up in production.
However, in modern society there is an uneven distribution of national income. As a result, for certain categories of the population, resources are insufficient to maintain vitality at the required level. In this case, the state is forced at the expense of the budget, and entrepreneurs through their own profits replenish the finances of the population and thereby increase disposable income.
At each stage of life, a citizen of the country and his family have different opportunities for receiving money. Moreover, at each stage they have their own needs, they are faced with tasks corresponding to the stages of life. And they strive to meet needs in many ways.
Disposable income depends on lifestyle, class, ability to work, health, market opportunities, labor market conditions, risk situation and other factors.
Belonging to the social class obliges a citizen to lead a certain lifestyle inherent in such. To provide an opportunity to act according to value ideas, to satisfy needs and interests, a certain level of income is required.
Stable consumption is ensured by the accumulation of funds, the creation of funds and their redistribution. Those surpluses that were formed in favorable years are redistributed and then used in less profitable periods. This allows you to meet the needs of the population and maintain a stable standard of living.
