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Average wage in Europe and Russia by PPP in 2020

Average wage in Europe and in Russia after tax. 

Many speak about average salaries in Europe, but few speak about their real size. The standard of living in Europe varies, respectively, the prices of food, clothing, food, housing and utilities are different. Somewhere to live cheaper, and somewhere more expensive.

Especially to compensate for this difference, the concept of PPP is introduced – purchasing power parity. It reflects many economic indicators (salaries, pensions, GDP) taking into account the price level.

Average wage in Europe

Each country has its own income tax rate. For example, in Germany it is almost 40%, and in Russia 13%. In Russia, there is 20% VAT, while in the USA there is no such tax at all, but this is offset by others. Accordingly, deductions by country will be different.

If we take into account the official average salary (in nominal terms), then it looks very modest, about 30-40 thousand rubles. But the picture will change if you calculate how much you can buy goods for this salary, compared with Europe.

In terms of PPP (US units are taken per unit), prices in Switzerland will be almost 1.4 times higher than in the states, and in Russia 2-2.5 times lower than the US. A popular method (albeit informal) is the Bigmack Index, which many often use.

Here is a map based on Eurostat calculations for 2020.

The average wage in Europe

Average wage in Europe
The real value of average salaries (PPP)

The leader among European countries is Switzerland ( $ 4280 per month ). The lowest value in the Republic of Moldova is around $ 700 . But in Russia – $ 1,400 per month (when calculating Eurostat by PPP, official data on the average salary in the country in rubles and the average ruble exchange rate were taken). But the TASS news agency cites the numbers $ 1600-1700.

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In Russia, as in the richest resource country in the world, fair wages should be more than 2-3 times .

And most recently, experts at the Higher School of Economics considered that the real salary in Belarus exceeded the real average salary in Russia. However, until 2014, the size of real wages in Russia exceeded that of Belarus. However, since 2011, the gap has narrowed, and after the fall of the ruble, Belarusian salaries at PPPs overtook Russian ones.

It should be clear that PPP equalizes the purchasing power of currencies in different countries. You can look at the calculation methods in the works of HSE experts, scientific articles on the subject of teaching staff, or in any textbook on economics.