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Ramaz Abesadze
The living standards of population and Georgia

Annotation. In the article are reffered the  terms related to the standards of living, the essence and meaning of economic development, is considerd an idea about some terms of  living standards. Also are examined the existing  level of living and is intentioned the way of it’s upgrading.

The key words: "the standards of  life", " the quality of life",

"a middle class" " an average social group ". 

Introduction 

The living standards  is a key indicator of human well-being and economic development. The higher the standards of living are so  higher  is the level of economic development and human well-being. Herewith  the economic growth  played a decisive role in raising the standards of living in the past, but  nowadays  the  progressive qualitative changes in  economy ( like usage of  the  new technologies, technics, human capital and institutions,  new types of products and goods, etc.) are provoked the change of some terms related to the standards of living.  For example, the terms: " the standards of living", " the quality of life", "a middle class" "an average social group".

The problem of distribution of the wealth  is one of the most important criteria for economic development. If the difference (that means, inequality) between the rich and the poor is growing, then  can be  said that we have no any economic development. Despite the high pace of globalization in Georgia, the  quality of life here is growing up slowly and nowadays it’s on a rather low level. 

The essence of living standards and related terms of it 

In economic literature there are  different kinds of terms for formulation the living standards or the level of life  In our view, this notion does not require the complicated and different explanations. The standards of living is the criteria of  the needs of concrete individuals as so as of the whole society. The higher the level of  satisfaction of individuals are in the same time it means that the  needs of the whole society are also higher, and vice versa. As a well known fact, our demands are  indistinguishable and they change  with increasing of  the living standards  (  producing of goods  generates the new demands).

The  living standards of  population, that is, how they live and how are satisfied  with their demands, are depended  on the number of factors, and the most important of them  is the current economic development of  country. Naturally, the higher is the level  of the country's economic development, in the same time is  higher the likelihood of satisfying by the  human needs.

In economic literature, the notions of 'the standards of life ' and ' the quality of life' are different. Although there are  some logic to find a distinction between these two terms,but  in our opinion, there is no significant difference between them. Both the standards of life and the quality of life , both encompass a qualitative and meaningful sides, because if the needs of human beings are not satisfactorily fulfilled,  can’t  be responded  a higher standards of living and,contrary. For evaluating the  level of people’s living will be better to use the term ‘ the living standards’.
 At the same time, it is important to consider some of the most relevant and qualitative  indicators of living standards.

Depending on the standards of living should be differ the  epochs, countries, people. The standards of living have a profound effect on the lifestyle. It is enough to visualize the different ages, nations, and people in the different levels of their  life and we can see how people of the same  nation, their lifestyle changes time by time. How the  rich and  the poor  lifestyle is different  in the same country. Of course, other factors ( like culture, traditions, socio-political discipline, profession, etc.) are also heavily influenced by lifestyle, but the most important factor  is the  living standards.

The  living  standards are more directly related to demands, because the demands  are satisfied by their satisfaction. The living standards, however, are  determined by satisfied the demands. Therefore, the living standards of the whole society depend on the jointly demands, and the standards of living of a concrete individual depends on his/her individual demands. The demands, themselves, are based on income and savings. Although consumptions reduce the current usage and in the same time the level of livelihoods, but in turn, it increases awareness in the future and consequently growing up  the standards of  life.
There is, of course, a direct link between the demands  and the standards of life  so if  the higher is level of development demands, the higher are  the standards of life. The nature of  development  demends is itself bound up with  qualitative changes in production line - the emergence of the  new types of goods and services, which is itself directly linked to innovation in  economy. But in the modern conditions, the means of information are so diversified that the new needs arise not only for the rich, but also for the poor, but the ability to meet these needs is very different for them, of course.Therofore often is inspired the confrontation between  different social groups. In this respect the most neutral is the middle class.

In order to assess the living standards, there is a whole system of indicators [Zherebin ..2002; Rumyantsev …2001; Meskhia ... 2004]. Their usage allows us to characterize certain aspects of the living standards. But in our opinion, the main indicators of the level of livelihood is income and the quality of goods and services for  individual as well as for the whole society. They depend on their degree of physical and spiritual needs as well as on the quality of life and comfort of their work (which can be determined by the scales of usage  of the latest types of products and goods). Consequently, the level of livelihood depends on both the level of economic development of  country and the quality of its economy, including the fairness of income distribution.

In the primitive society  there was not a  difference between the rich and the poor, so everything that had been gained was consumed equally, though should me marked that in different communities (tribes) and regions would still be a different situation (by natural resources, skills, the tools and etc).. The dividing  between  the rich and the  poor had been eroded after disrupted facts of history of mankinds ( that are well known nowadays) and by some  other factors . The certain layer of livelihoods made up a greater proportion of income for some people and than they became richer than others. For example,  the slave – holders- the slaves, the nobles- the peasants ,  the capitalists – the workers. Poverty is defined as the difference not only by material possessions, but also with other values ​​(like education, culture, the degrees of freedom, etc.). It can be said that historically, all slaves and peasants  (with very few exeptions) could be considered as permanent  the poor. In capitalism, however, the status quo has been radically changed,  the workers and peasants are legally free  and it is impossible to concuss them for working. And the capitalist is forced to devote more of  income of workers  (or peasants)  than the slave-holders made. Into serfdom was emerged an average group of people that has become the largest part of society under capitalism. There are various views on the middle class in  political economy . Some consider it to be one of the most divisive and even middle class constituents of society. For example, sociologists William Thompson and Joseph Hayek [Thompson 2005] classified the society by earnings, for according  income as : the higher level group, the middle high group, the lowest middle group, the working class, and the lowest group.

We think that a middle average group cannot be called a class, since the notion of class is related to a certain social status of its members (which is mainly of  the socio-political significance. And there is a permanent  conflict between classes which often turns into a class struggle). The level of earnings is largely linked to economic status  ( but not only it is important, also the level of education, intellectual property, qualification, labor skills, etc.) and is a multi-faced part of society which  membership varies nearby the average level of concrete country. The representatives of this group are not the poor or the  rich. Its rather  diverse  and  mobile. In that group could be involved the various members of society like are: workers, peasants, entrepreneurs, statesmen, scientists, writers, sportsmen and etc).

The existence of  middle class has a great importance for eco-nomic development. It significantly affects the macroeconomic and overall social and political stability of  country. That is why in the developed world this group is the largest part of society.
The term "a middle average group" (and not the class) had been firsly used by Aristotle, probably to reffere the  artisans, merchants, warriors, and  so on, whose condition was better than the   slaves, and worse than the  slave-holders. That part of ancient society would naturally never participated  in the mutiny of slaves .

Nowadays in the developed world, an appression of the middle class is so great and the living standards  are so higher that  the division of society into classes is altogether pointless (as reflected by M. Weber, T. Parsonses, R. Darren-Dorf, B. Barber, K. Davis, W. Morris, P. Collins and etc). Therefore, society is divided only into "stratas” or ‘groups’ without antagonism between each other.

From a historical point of view, in general, it can be said that time to time people’s living standards  became better than in previous centuries. It means that  has a tendency to increase wealth. Therefore, the  today's poor may be much richer than the rich of earlier centuties, not just in terms of income growth, but, more importantly, by improving the comfort of their livelihoods, driven by qualitative changes in economy. For example, the representative of the middle class of today's developed country is much richer than any pharaons of Egypt or any emperor of Rome, because ( their living conditions were less comfortable - they could not enjoy by the modern  transportation and communication skills, TV set, video and audio technologies, filmmaking, the internet and etc.

But even within the same  country, life is not equal. The groups differ significantly in terms of this indicator. The higher level of the Gini coefficient mainly exists in the least developing countries, but there are some shortcomings even there, which indicate that unfair distribution of income is not always necessarily depended at the level of economic development. It is defined by specific traditions and a fully can be defined by the  state regulation of economics.

The living standards in Georgia 

In recent years, the living standards in Georgia have been increased, but in a lower rate. The following figures indicate that:· the gross of domestic products  increased by 11.4% in 2015-2018, by 17.5% per capita, with an average monthly nominal wage of 18.6%; the number of people who have been living below the poverty line decreased by 7%, the unemployment rate fell from 14.1% to 12.7%, the absolute poverty reduced from 21.6% to 20.1% . But during the last two years, the depreciation of GEL and other  inflationary processes were reduced  the  living standards.

It should be noted that despite the slow improvement in the quantitative indicators of living standards in Georgia, the comfort of living has significantly changed as a result of the use of qualitatively new foreign technology, technics, products and  goods .
            It is necessary to raise the living standards in Georgia by:

1. Making qualitative changes, at first, with  introduction of foreign technologies and consumer goods, and then with the creation of  innovative system that will be based on own research;

 2. Creating institutional arrangement of the labor market, founding the civil services and it’s relevant infrastructure.

 3. Granting foreign direct investments to local market with prioretizing the local workers employment.

4.  Supporting of the state programs  for  development the import succenturiated and export 5oriented sectors.

5. Minimizing the level of corruption.

6. Supporting  the  small business development by widen infrastructural projects which will be granted by state ; [Abesadze ... 2009]

7. Organizing public workplaces for which the state can use the budget funds, foreign credits and grants. 

Conclusions

  1. The terms " the standards of  life" and " the quality of life"nowadays are  differed from each other and it  is incorrect, because the  both terms ‘ the standards of life”  and “ the quality of life”  include the  quantitative and profiliration aspects.
  2. It is unacceptable to use the term " a middle class" instead of "an average group of people". A middle class cannot be called “ a class”,  because the notion of class is associated with a certain social status of its constituents. And a middle class is largely related to its economic situation and is a diverse part of society whose members' incomes range nearby of  the average level of society’s  input.
  3. The problem of distribution  the wealth  is one of the most important criteria for economic development. If the difference (that is, inequality) between the rich and the poor is growing  then there can’t being an economic development.
  4. In recent years, the living standards in Georgia have been rising, but by a  slower pace, though the comfort has been changed significantly, by  using the  new foreign technologies, technicss and  goods, etc.

For raising the living standards in Georgea are necessary:

  1. Making qualitative changes,at first, through  using  foreign technologies and consumer goods, and then by the creation of  own innovative system that will be  based on local research.
  2. Creating  institutional arrangement of  the labor market, through founding the  public services and it’s relevant infrastructure.
  3. Granting the direct foreign investments and giving preference to  local workers  employment .
  4. Supporting of the state programs for  development import succesnturiated and export oriented sectors.
  5. Minimizing the level of corruption.
  6. Supporting  the small business development by widen  infrastructural projects which will be grantated by state.
  7. Organizing public workplaces for which the state can use the budget funds, foreign credits and grants.

Literature 

  1. Abesadze R., Kakulia E.2009. The Mechanism for  Regulation the Small Business in Georgia. Tbilisi,Paata Gugushvili Institute of Economics.
  2. Abesadze R., 2013. The  Living Standards of Population, Poverty and Unemployment in Georgia.Georgian Academy of Sciences. Tbilisi, "Siakhle",, t. 10;
  3. Ilin Wyu. А. 2016  The Living Standards of Population : The regional research experience. http://bookash.pro/ru/book/184274/uroven-zhizninaseleniya-opyt-regionalnyh-issledovanii-v-a-ilin.Meskhia
  4. ,Gabelashvili K. 2004 The Living Standards of Population. Analysis and Forecast, Kutaisi State University Publishing;
  5. Rumyantsev E. Е. 2001  The Strategy of  Reduction Po erty. Minsk, "Armira - Marketing, Management";
  6. Thompson W.2005. Joseph Hickey. Society in Focus. Boston.
  7. Zherebin V. M., Romanov А. N.  2002. The  Living Standards of Population. М., «Unity».


  • · Here and elsewhere, where no indication is given, indicators are calculated according to the data provided by the Statistics Office of Georgia.