# 6. Wages and Salaries in Ukraine

As noted in the previous section, real per capita family income fell substantially in 1992. There is evidence that the Ukrainian economy deteriorated further in 1993. Family Budget Survey results are not available to assess the standard of living since 1992. However, data on average and minimum wages for the beginning of 1993 were provided to us by the Ukrainian statistical department. This information is summarized in Table 7. It can be observed that the total average wage and the average wage of industrial workers fell by about 10 percent between 1991 and 1992. The deterioration in wages is quite striidng since 1992. In early 1993, real wages for all workers were about sixty percent of what they were in early 1992. The decline in wages among the industrial workers has been even greater.

The drastic fall in real wages is due to the deliberate wage and income policy pursued by the Ukrainian govemnment. In an effort to control inflation, the government has suspended wage indexation and introduced tax-based wage controls on January 1, 1993. This led to a substantial reduction in real wages. Average nominal monthly wages increased by 16 percent in January and by only 9 percent in February 1993, whereas inflation rates during these months were 97.3 and 26.3 percent, respectively. These results tend to suggest that the standard of living in Ukraine is falling at a phenomenal rate. Will the govemment continue squeezing real wages? How much more do real wages have to fall before there is a slowing down of rie inflation? While it is not possible to answer these questions, it is useful to consider what is ikely to happen to the distribution of income and poverty in ULkraine. This is attempted in Sections 7, 8 and 9.

In the mean time we consider the issue of male-female differentials in earnings. The distributions of earnings among men and women are summarized in Table 8. It is evident that women on average earn considerably less than men. This conclusion holds for all levels of education and age groups. The ratio of female-male earnings varies quite substantially with respect to education and age. The ratio is highest among workers with higher education.

The disparity of earnings between male and female workers exists in Ukaine despite the fact that the Soviet Union had in its constitution a provision for sexual equality. Several reasons may be given for this disparity, but the most important ones are the levels of educafion, age, occupational segregation and hours of labor supply. Since the results presented in Table 8 tabe account of education and age, the remaining two reasons, viz, occupational segregation and hours of labor supply are most likely. These two factors are likely to be less important among workers with higher education. It is, therefore, to be expected that the ratio of female-male average earnings will be highest among these workers.

'Our finding that women are least discriminated against at high education level is an interesting one because the finding in other countries is often the opposite. In the West, difference between women and men is greater at higher levels of education than that for low-sldlled jobs.

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