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Roman Gotsiridze: “GEL 15 billion in salaries are paid in Georgia and income of 45% of those who receive salaries, is GEL 500 and less.”

Verdict: FactCheck concludes that Roman Gotsiridze’s statement is MOSTLY TRUE.

Resume: The figures to which Roman Gotsiridze is referring are from statistics on taxable (before taxes) salaries. In 2019-2020, nearly GEL 15 billion was paid annually in salaries whilst the annual salary of 45% of total wage-earner physical persons is GEL 6,000 (on average GEL 500 per month).

At first glance, these numbers are fully in line with Roman Gotsiridze’s figures. However, if we take a look at monthly salary payments, we will see that on average only 23% of employees has a salary less than GEL 500. This means that many people had unstable employment and did not receive a salary every month (for instance, seasonal employment). In other words, part of the employees in those months when they had jobs received salaries over GEL 500, although they had no salary income in the next few months. However, since the context of the MP’s statement is to highlight low income instead of the assessment of wage policy, it is relevant to use average annual figures when discussing salaries earned by the population.

Of additional note is that Roman Gotsiridze’s statistics are about gross salary and, therefore, the net salary for people is even less which lends further credibility to his argument. However, on the other hand, the statistics do not include people employed in the informal sector (for instance private tutors or outdoor vendors) and at the same time includes people who do not have uninterrupted employment for objective reasons or for their own choice (for instance students) and these make the average salary figure look exaggerated.

Ultimately, Roman Gotsiridze is right in emphasising that many people earn a low salary which is indeed a harsh reality. However, since this statement requires additional clarification, FactCheck concludes that Mr Gotsiridze’s statement is MOSTLY TRUE.

Analysis

United National Movement member and MP, Roman Gotsiridze, stated at the hearing of the Minister of Finance in the Parliament of Georgia: “GEL 15 billion in salaries are paid in Georgia. Of this amount, 45% are for people whose income is GEL 500 and less.”

A salary is only source of income for many people. Other sources of income can be interest earning, dividends, profits, scholarships, rent income, etc. The Revenue Service processes information about the salaries paid and the people who are paid these salaries. The figures in Roman Gotsiridze’s statement match with the statistics of the number of physical persona and taxable incomes (before taxes) received as salaries.

Table 1: Taxable Income Received as Salary in 2019-2020

Source: Revenue Service

Roman Gotsiridze’s statement gives an impression that the monthly income of 45% of employed individuals is GEL 500 or less. In 2019-2020, nearly GEL 15 billion was paid annually in salaries whilst the annual income of 45% of total wage-earner physical persons was within the margin of GEL 6,000. However, averaging this figure (GEL 500 per month) does not provide a comprehensive picture in terms of the distribution of income over the course of a year. In particular, the annual statistics provide the total sum which was paid to people as a salary. For an employee who did not receive a salary for the entire year, the averaged figure does not reflect the full salary dynamic. For instance, those individuals who received salaries of GEL 1,000 for six months and did not receive a salary in the next six months for a number of reasons are registered to have a GEL 500 monthly salary.

In order to analyse the “inequality” of wage distribution, the salary dynamic should be discussed in a monthly prism. Table 2 provides the relevant statistics. These figures show that a significant part of the population does indeed have a GEL 0-500 salary and this amounts to 23% of employed individuals on average in a year. However, this figure is certainly much lower as compared to 40%. Thirty-five percent of employees receive salaries within the margin of GEL 1,000-2,400.

Table 2: Monthly Distribution of Taxable Salary in 2021

Source: Revenue Service

Since the aforementioned statistics show taxable income, it should also be taken into account that the net income of the population is even less. Therefore, it is only natural that the statistics of the Revenue Service do not take into account self-employed individuals or those employed in the shadow economy who do not pay income tax. Therefore, the full statistics in the country are varied.


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