30 June 2010

Ukraine still a low cost economy (But only officially)

Average Wages Up By 4.4% in Ukraine to UAH 2,200 Per Month In May 2010.
In May, average wages went up by 4.4% or UAH 94 to UAH 2,201 per month, compared with April, the State Statistics Committee has informed.
The highest rate of average wages was registered in the city of Kyiv at UAH 3,293 per month.

Even at the highest rate in Kyiv, thats still just Euro 340 PER MONTH or GBP 276 PER MONTH. Average wages are still very low in Ukraine compared to other European countries. We all know that wages are also paid in the 'black economy' so these figures are always distorted from the real facts. But even if the average employee was getting another 100% in the black economy its still around Euro 680 per month or GBP 552 per month. Difficult to understand why more companies are not rushing to set up shop in Ukraine with such low wage costs?

Even then, many Ukrainian employers including the state fail to pay employees on time and we have what is called in Ukraine a wage arrears situation. (Can you imagine this in another country?)

As of June 1, 2010, the volume of unpaid salaries and wages rose by 11.1% compared to May 1, 2010, to UAH 1,887.023 million, the State Statistics Committee has informed.
As of June 1, 2010, the most considerable volumes of wage arrears were observed in Donetsk region amounting to UAH 362.514 million, UAH 171.810 million in Luhansk region, and UAH 167.797 million in Kharkiv region.
In May, the arrears of wages paid from the state and local budgets rose by 37.5%, compared to April, and totaled UAH 32.969 million as of June 1, 2010.
In particular, the arrears of wages paid from the state budget made up UAH 32.846 million, from local budgets UAH 0.123 million.
At the same time, the State Statistics Committee reported that, according to its operational data, in the period from June 1 to June 15, the economically active enterprises have paid wages arrears amounting to UAH 225.2 million.
Thus, the total amount of arrears as of June 15 amounted to UAH 1,661.8 million (97.9% as of May 1), and in the economically active enterprises - to UAH 1,073.8 million (97%).

The volume of unpaid salaries and wages rose by 11.1%........

Its sad that people in Ukraine put up with this. Little do they know that wage arrears are just totally unacceptable in countries like the UK.
In Ukraine employers openly tell employees..."We have no money" and employees continue to work.
It still brings a smile to my face when I think about what would happen in the UK, if you told your employees that "We have no money".

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