Levan Khabeishvili: “Some 300,000 people have salaries under GEL 800.”

Verdict: FactCheck concludes that Levan Khabeishvili’s statement is HALF TRUE.

Resume: As reported by the Revenue Service, there were 238,000 people in July 2023 who had a GEL 800 gross salary whilst the number of those people whose salary after income tax was GEL 800or even less was 310,000. It is likely that the chairperson of the United National Movement was referring to the net salary.

Despite providing a figure which is technically accurate, based on statistics there are 13,000 employees who have a GEL 100 gross salary which after taxes would be GEL 80 which is unrealistic and does not reflect the labour remuneration of a person who works full-time.

Analysis:

On 4 September 2023, in his speech before the Parliament of Georgia, the Chairperson of the United National Movement, Levan Khabeishvili, mentioned the amounts of salaries when speaking about the social situation in the country: “If you take a look at the official document of the Revenue Service, you will see that over 300,000 people have a salary under GEL 800.”

According to the National Statistics Office of Georgia, the average taxable salary in Georgia was GEL 1,717 in the first quarter of 2023. Of that amount, GEL 1,346 GEL was left for the employee after deducting the pension contribution and income tax.

The average salary gives some understanding of the labour remuneration in the labour market but it is impossible to determine what individuals are earning.

Depending on the type of work, the position occupied or the qualification of the employee, salaries differ significantly from each other. As of the first quarter of 2023, the nominal salary of employees in the financial sector is GEL 3,761, employees in the field of information and communications earn GEL 3,630 on average whilst the salary in the field of education is merely GEL 1,009.

In 2021, the average gross salary was GEL 1,305 GEL (GEL 1,023 GEL net) and the median salary was 31% less or GEL 900 GEL (GEL 705 GEL net). Since then, the National Statistics Office of Georgia has not released information about the median salary.

More detailed information about salaries – how many employees have a salary under GEL 500, from GEL 500 to GEL 1,000 or over GEL 10,000 is accessible on the website of the Revenue Service. In July 2023, of the 945,000 employees – 305,500 people had a gross salary from GEL 1,200 to GEL 2,400, some 310,000 employees had a gross salary under GEL 1,000 and 238,000 had a salary under GEL 800. About 7,700 employee had a salary above GEL 15,000. If we do not consider taxes in the salaries, the number of people who have a GEL 800 net salary will be 310,000 according to the official statistics.

Both the average and the median salary refer to the salary of a full-time employee. Unlike the amount of labour remuneration, information about the number of hours worked by an individual is not found on the income service page. In practice, many people work part-time or freelance and get paid for specific work performed. For certain needs such as, for example, to replace a faucet, a company can hire a non-staff employee for only one hour and theoretically pay GEL 50 GEL. Naturally, it would be wrong to claim that the craftsman's salary is GEL 50 because he worked only one hour instead of the standard 173 hours (a 40-hour working week is 173 hours per month).

In education, some teachers have to work part-time in other jobs owing to their low salary. Some teachers teach five or seven lessons a week instead of 18 which affects their salary at the end of the month.

Graph 1: Gross Salary and the Number of Earners

Source: Revenue Service

The calculation of an hourly wage is more accurate but there is a second problem. Under high unemployment, a person may work part-time but not by his own willing. To put it more simply, he can work 20 hours a week for GEL 600, agree to a 40-hour work week for GEL 1,200 or even agree to overtime work in exchange for an additional income but cannot find a suitable full-time job.

Along with low wages, one more circumstance should be taken into account; that is, informal employment. The income of some tutors, taxi drivers, craftsmen and so on is unregistered and its volume can only be a matter of approximate calculations. The shadow economy, one part of which is informal employment, makes an accurate calculation of both the GDP and citizens' income quite difficult.

The answer to the question of how many people have a salary under GEL 800 depends on the methodology we are going to employ. Formally as of July 2023, there are 238,000 such people but if we take the net salary as a measure after deducting income tax, their number will increase to 310,000. The vast majority of people consider their salary to be the amount that remains after deducting the pension contribution and income tax. Levan Khabeishvili named the Revenue Service as his source. Although he did not state this, the MP was probably referring to the net salary which thus makes his statement inaccurate. In addition, Mr Khabeishvili officially equated the number of people working for GEL 100 and for GEL 200 GEL to be full-time employees which leads to a wrong interpretation. Given that he made formally a more or less accurate statement, although failing to mentioned a necessary detail, FactCheck concludes that Levan Khabeishvili’s statement is HALF TRUE.


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