In accordance with the information of the National Statistics Office of Georgia, the average monthly nominal salary in the third quarter of 2022 increased by 16.5% (GEL 226.5) as compared to the same period of the previous year and reached GEL 1,595. As compared to the second quarter of 2022, the growth is only GEL 54, although such a comparison can only be tentative given the seasonal factor and it is relevant to draw comparison with the same quarter of the previous year.

Of interest is that in terms of fields of activity, wages are relatively higher in the following: information and communication - GEL 3,330 (as compared to the relevant period of the previous year, it increased by 51.8%), finance and insurance - GEL 2,474.7 (increased by 10.7%) and construction – GEL 2,304 (increased by 15.1%).

It is also important to differentiate between nominal and real wages. When the nominal wage is increased, an individual earns a larger salary. However, taken separately, this indicator says nothing whether or not a wage-earner’s social situation has improved because it does not take into account the price level change effect. In other words, it is more important if an individual is able to buy more products with a larger salary.

Inflation-adjusted wages illustrate that growth happened only vis-à-vis the pandemic years. As compared to the third quarter of 2021, the real wage increased by GEL 72 whilst the real wage has remained basically unchanged since 2019 up to the present day.

Graph 1: Dynamic of Nominal and Real Wages in 2018-2022, Quarterly Data

Source: National Statistics Office of Georgia, author’s calculations

Of additional note is that wage statistics above do not show the net amount but, in fact, a gross sum where a further 20% is deducted as income tax. Therefore, GEL 1,595 after taxes decreases to GEL 1,275. In the case of some employees, the pension contribution is also deducted. It should also be taken into consideration that a large part of the population in reality earns below the average wages and the average figure is greatly affected by a smaller portion of the population with higher incomes.

It is also obvious that recent high inflation rate is also “eating up” the already low incomes of the population. This predicament is rather problematic for the population and one of the reasons for the increased migration from the country.