Living on a low income as a systemic impediment to socio-economic development of Ukraine

Abstract

The article sheds light on various approaches that seek to determine how widespread poverty and life on a low income are in Ukraine nowadays. As a social phenomenon, poverty has traditionally been associated with destitution and living below the subsistence level set by the government. However, the author holds the view that life on a low income not only means living near or below the poverty line. There is another part of Ukraine’s population that should also be considered needy — those whose income is less than twice as the subsistence level, and most of them are also subject to socio-economic deprivation. Drawing upon the findings of a social survey conducted by the Institute of Sociology of the NAS of Ukraine in 2019, the paper analyses the standard of living among different income groups. Particular attention is given to consumption patterns and social well-being of respondents in the lower income brackets. From the data, it can be inferred that living conditions of many Ukrainians are inadequate to sustain and develop human potential; furthermore, the low-income households have literally to struggle every day to make ends meet. The author brings into focus the main macroeconomic factors contributing to this situation and its adverse effect on the nation’s social potential. Some of the most common social consequences of living on a low income have been identified, such as limited consumption, a person’s dissatisfaction with life and his/her position in society. The above-mentioned survey also provides the estimates of how much the current subsistence level (with regard to Ukraine) should be. Having been made by different socio-demographic and occupational groups of Ukraine’s population, these estimates are a useful source of information — given that subsistence level is considered the basic social standard. According to the survey, all these figures are at variance with the official subsistence level, which is noticeably lower, and this indicates that the current subsistence level needs an upward revision. Today, the overall socio-economic situation in Ukraine is unfavourable for neoliberal economic reforms initiated by the government. Since these policies are primarily designed to reduce the role of state in managing the economy and implementing social welfare programmes, following this path will inevitably result in the entrenchment of mass poverty and in a major loss of Ukraine’s human potential, as well as labour force. The author argues that tackling the country’s chronic low income problem is only possible if a new strategy for socio-economic development is adopted, where social welfare is prioritised.