Irakli Petriashvili: “If GeoStat calculates how many people in fact have at least an average salary, the result will be completely catastrophic because we live in a country where the salary of 130,000 people is lower than the subsistence minimum measured by GeoStat.”
Verdict: FactCheck concludes that Irakli Petriashvili’s statement is MOSTLY FALSE.
Irakli Petriashvili, speaking about the methodology employed by the National Statistics Office of Georgia to measure the average salary, explains that this figure does not reflect income inequality. In other words, Mr Petriashvili claims that the number of people who have salaries similar to lower than average pay is not clear. To illustrate his claim, he states that 130,000 people have salaries lower than the subsistence minimum measured by the National Statistics Office of Georgia. Supposedly, his statement is based on statistics retrieved from the Revenue Service about incomes received as salary. However, naming these statistics within the context of annual salary and without providing relevant clarification will show a reality which is more drastic than it actually is because the statistics also include people who do not work full-time or perhaps were involved in day labour. In addition, these statistics certainly do not include individuals employed in the so-called shadow economy who may in fact have higher income and occupy jobs which are part of the measurable economy at the same time. In turn, statistics of the National Statistics Office of Georgia vis-à-vis those people with an incomplete work day or an incomplete work week are added to the average pool of employees in terms of the proportion of the time they have worked.
In addition to the aforementioned, the statement also includes a factual inaccuracy. In particular, according to the statistics of the Revenue Service, there were roughly 80,000-85,000 people who received a salary under GEL 300 between February to September 2022 (however, as mentioned earlier, this is not necessarily their monthly wage but it could be a salary earned for a certain job performed in a certain period of time). There were 120,000 people within this margin in January alone. There is a kernel of truth in the spirit of the statement that many in Georgia earn less than an average salary and wages in the country are generally not high. Therefore, given the abovementioned circumstances, FactCheck gives this statement the verdict of MOSTLY FALSE since it contains elements of truth, although many important facts that could lead to another impression are overlooked and numeral claims are inaccurate.
Irakli Petriashvili, President of the Georgian Trade Unions Confederation, stated the following about wage statistics: “If GeoStat calculates the number of people who in fact have at least an average salary, the result will be completely catastrophic because we live in a country where the salary of 130,000 people is lower than the subsistence minimum measured by GeoStat. The subsistence minimum is either GEL 201 or 203.” Following this statement which he made to criticise the statistics of the National Statistics Office of Georgia in terms of the average salary, he also added: “This figure for the average salary – GEL 1,304 – which the National Statistics Office of Georgia calculated is simply the result of someone in top-management having a GEL 60,000 salary whilst his workers may have GEL 400-450-500 and so the average figure looks decent.”
The National Statistics Office of Georgia compiles average salary statistics based on surveying 15,000-18,000 enterprises. This survey includes all enterprises and organisations carrying out economic activities and the subjects of survey are full-time and non-full-time employees of enterprises/organisations whose labour relations with them are governed by a respective contract. Of important note is that employees with an incomplete work day or an incomplete work week are added to the average pool of employees in proportion of the time they have worked. For instance, the working time of ten non-full-time employees may be compiled as equivalent to the working time of five full-time employees for statistical purposes.
Table 1: shows the statistics of the average monthly nominal salary and the subsistence minimum for 2015-2022.
Source: National Statistics Office of Georgia
Certainly, there will be people whose salary is lower than the average salary. On top, this figure is income before taxes and, therefore, 20% of income tax and 2% of the pension contribution will be deducted additionally from the net salary.
Irakli Petriashvili highlights the flaw of the average salary calculated by the National Statistics Office of Georgia, claiming it does not show the number of people who have wages similar to or lower than the average salary. In order to further underscore the severity of the situation, he claims that 130,000 people earn salaries that are less than the subsistence minimum measured by the National Statistics Office of Georgia.
Table 2: Monthly Distribution of Physical Persons Receiving Income as Salary in 2022
Source: National Statistics Office of Georgia
There were approximately 80-85 000 people who received a monthly salary of GEL 0-300. The only exception was January when 120,000 people earned a salary of GEL 0-300. Therefore, the number provided by Irakli Petriashvili (130,000) is higher than the actual figure. Of additional important note is that the statistics of the Revenue Service also include individuals who did not work full-time or performed day labour. In addition, these statistics certainly do not include those employed in the shadow economy who do not pay income tax. Therefore, the total statistics are different across the country. It is possible that one individual performs unaccountable work as well as work which is taxable such as in private or public companies and their salaries were included in a lesser amount than they actually were.
Given all of the aforementioned, the statement that 130,000 people have salaries lower than the subsistence minimum measured by the National Statistics Office of Georgia is factually inaccurate, on the one hand, and leads to a more drastic impression of the current situation without proper clarification, on the other hand. Nevertheless, Irakli Petriashvili’s claim that many in Georgia earn less than the average salary and that wages are generally not high in Georgia is indeed true.