Real Incomes of the Population

the portion of the national income used by the population for consumption or accumulation. Unlike monetary (nominal) incomes, real incomes are defined by the quantity of material goods and services acquired, taking into account changes in retail prices and expenditures for the payment of taxes, as well as other compulsory payments.

Real income is calculated by deducting from the total of the population’s cash and in-kind incomes payments to the budget, payments to public and cooperative organizations, increases in all types of cash savings, and the portion of expenditures for services that exceeds the value of the material content of the services. The remaining sum, which equals the value of the material goods consumed and, to some extent, accumulated by the population, constitutes the fund of disposable incomes actually utilized during a particular period. The dynamics of real incomes are determined by expressing the disposable incomes for different periods in comparable prices.

The real incomes of the population are a generalizing index of the standard of living. Unstable, uneven growth (and during some periods, outright decline) in real incomes is characteristic of capitalism. The real purchasing power of the working people declines as a result of the continuous rise in prices, or inflation. In socialist society the planned growth of the real income of all strata of the population is ensured. To make the standard of living of the workers and peasants approximately equal, the real incomes of the kolkhoz members are increased more rapidly than those of the workers. Between 1940 and 1974, real per capita incomes in the USSR increased by a factor of 4.7. The real per capita incomes of factory workers and office employees increased by a factor of 3.4, and the real per capita income of the peasants, by a factor of 5.6. In 1974 the per capita incomes of kolkhoz families, on a nationwide basis, amounted to nine-tenths of the incomes of the families of sovkhoz workers and employees and about three-fourths of the incomes of the families of factory workers and office employees.

Socialism eliminates the excessive differentiation of incomes, which is characteristic of capitalism and is associated with the exploitation of labor. It guarantees the gradual diminution of the differences between the standards of living of various social groups in the population. Payment for labor is the chief form of income for the population and the source of increases in the standard of living. Under the ninth five-year plan (1971–75) wages accounted for about three-fourths of the total increase in the real incomes of the population. Social consumption funds, which are growing more rapidly than the wages fund, are playing an increasingly important role in the growth of real incomes. The stable growth of the incomes of the working people is ensured by the stability and decline of retail prices for consumer goods. Real incomes also increase with the elimination of taxes.

The consistent implementation of the party’s policy of raising the standard of living of the people, as well as the increase in real incomes, ensures a considerable increase in the consumption of foodstuffs and nonfood commodities; the improvement of housing conditions for the working people; the development of public health, education, and culture; and an increase in leisure time for the working people. All of these improvements signify the fuller satisfaction of all the material and nonmaterial needs of the people.