Working time needed to buy goods and services

A comparison of the working time needed to buy goods and services can serve as the clearest indicator of changes in the purchasing power of a gross wage. It is calculated using an hourly gross wage compared to retail prices of goods and services in September each year. Some structural changes have been perceived over a longer period of time. A very obvious downward trend has been observed regarding the working time needed to buy goods, a less obvious downward trend regarding the time needed to pay for services, and even an upward trend regarding payment of infrastructural services.

Regarding the working time needed to buy food, a considerable drop has been recorded in the time needed to buy products of processed food, except for bread; the time needed to buy agricultural products was largely affected by the quality of yield (good or bad yield) of certain products (e.g. apples, potatoes, lettuce) and consequently varied considerably.

There has been a general increase in the time needed to buy the goods related to housing. Time needed to pay for utility services and fuel has also been up, but it has decreased as regards electricity and water for households. The largest drop was recorded for the time needed to buy industrial products of housing equipment.

Thanks to a rapid technological development, the prices of comparable high-technology industrial products have dropped considerably.

Table 14: Working time to buy food, of hourly gross wage, Slovenia, in 1997, 2000, 2003 and 2007

1997 2000 2003 2007 2007/1997

Brown bread (t-850) [kg] 11 minutes 15 minutes 16 minutes 16 minutes 143.4

Unboned beef [kg] 1 hour 16 minutes 1 hour 8 minutes 1 hour 2 minutes 56 minutes 73.7

Fresh milk, 3.5% milk fat [l] 6 minutes 7 minutes 6 minutes 5 minutes 77.8

Apples, table [kg] 10 minutes 8 minutes 10 minutes 8 minutes 82.6

Frozen mixed vegetables [kg] 49 minutes 45 minutes 30 minutes 22 minutes 44.2

Source: SORS; calculations by IMAD.

Table 15: Working time to buy goods and services related to housing, of hourly gross wage, Slovenia, in 1997, 2000, 2003 and 2007

1997 2000 2003 2007 2007/1997

Non-profit rent [m2] 17 minutes 16 minutes 19 minutes 19 minutes 108.0

Water for households [m3] 6 minutes 7 minutes 8 minutes 4 minutes 77.4

Sewage system fee [m3] 4 minutes 4 minutes 7 minutes 8 minutes 203.2

Fuel oil, extra light [l] 3 minutes 6 minutes 4 minutes 5 minutes 149.8

Electricity, day time tariff [10 kWh] 10 minutes 11 minutes 10 minutes 8 minutes 81.0

Natural gas, for heating [sm3] 3 minutes 4 minutes 4 minutes 4 minutes 138.5

Vacuum cleaner, 1600–1800 W [piece] 22 hours 33 minutes 22 hours 24 minutes 18 hours 56 minutes 15 hours 32 minutes 68.9 Washing machine, 5–7 kg, 800–1300 rpm 78 hours 17 minutes 81 hours 50 minutes 73 hours 36 minutes 61 hours 3 minutes 78.0 Source: SORS; calculations by IMAD.

Table 16: Working time to buy goods and services related to transport, of hourly gross wage, Slovenia, in 1997, 2000, 2003 and 2007

1997 2000 2003 2007 2007/1997

Passenger car Renault Clio [piece] 12 months 10 months 3 weeks 9 months 1 week 8 months 3 weeks 73.4 Compulsory car insurance, 31–40 kW 37 hours 55 minutes 42 hours 49 minutes 47 hours 23 minutes 41 hours 39 minutes 109.9 Women’s bicycle (ctb), about 26 gears 38 hours 56 minutes 31 hours 8 minutes 27 hours 40 minutes 23 hours 26 minutes 60.2

Petrol unleaded, 95-oct. [l] 6 minutes 8 minutes 8 minutes 8 minutes 120.0

Urban passenger transport by bus 8 minutes 9 minutes 10 minutes 8 minutes 94.3

Source: SORS; calculations by IMAD.

Table 17: Working time to buy clothing and footwear and goods related to hygiene, cosmetics and health, of hourly gross wage, Slovenia, in 1997, 2000, 2003 and 2007

1997 2000 2003 2007 2007/1997

Women’s raincoat, lined 41 hours 20 minutes 36 hours 31 minutes 31 hours 42 minutes 16 hours 1 minutes 38.8 Men’s suit, predominantly wool 41 hours 26 minutes 46 hours 8 minutes 35 hours 34 minutes 30 hours 10 minutes 72.8 Children’s trousers, jeans, size 12–14 5 hours 9 minutes 4 hours 35 minutes 4 hours 19 minutes 3 hours 46 minutes 73.1 Laundry detergent, powder, for washing

machines [kg] 21 minutes 18 minutes 20 minutes 23 minutes 109.9

Aspirin, 20 tablets 22 minutes 26 minutes 28 minutes 27 minutes 120.1

Mercury thermometer 36 minutes 34 minutes 30 minutes 18 minutes 50.5

Source: SORS; calculations by IMAD.

Goods related to transport nowadays play an important role in job and family obligations. This is why purchasing power in this area is very important. Although the trend for means of transport has been the same as that for industrial goods in general i.e. the working time required

to buy them has been decreasing, there has been an obvious rise in the time needed to pay for services related to individual transport, and for fuel, which accounts for the prevailing share of this type of expenditure.

Table 18: Working time to buy services and for eating out, of hourly gross wage, Slovenia, in 1997, 2000, 2003 and 2007

1997 2000 2003 2007 2007/1997

Dry-cleaning a suit 1 hour 45 minutes 1 hour 47 minutes 1 hour 40 minutes 1 hour 28 minutes 84.3 Fashionable men’s haircut 1 hour 39 minutes 1 hour 44 minutes 1 hour 35 minutes 1 hour 38 minutes 99.1

Painting of rooms [m2] 17 minutes 18 minutes 16 minutes 16 minutes 91.6

Regular theatre performance 2 hours 11 minutes 1 hour 58 minutes 1 hour 46 minutes 1 hour 40 minutes 76.4

Pizza (classic) 41 minutes 39 minutes 37 minutes 40 minutes 96.7

Source: SORS; calculations by IMAD.

It is typical for the above goods and services related to food, housing and transport that their consumption is to some extent non-elastic; in other words, everyone needs to eat, pay the bills for electricity, gas and somehow get to work and back. The consumption of the groups of goods that follow is somewhat more flexible. The working time needed to buy most goods in the groups

“clothing and footwear” and “hygiene and cosmetics” has decreased in this period.

The working time needed to pay for various household and housing services and personal care, goods related to culture, recreation and education, as well as for eating out, has dropped less markedly than the time for the two groups of goods above. The consumption of these goods can also be adapted to the level of one’s gross wage.

The above analysis used as a reference the average hourly gross wage. However, it is also interesting to compare the working time required to buy goods and services in terms of the hourly gross wages of the first decile, median and the ninth decile. The comparison was made for 1997 and 2007 data. The analysis has to take into account that the distribution of the employed has been very densely clustered at the right-hand side of the scale (lowest wages), which means that for wages lower than the gross wage of the first decile, the time required to buy goods has been longer, but the differences were not so obvious because of the high density of wages at this part of the scale. The wages above the ninth decile, however, are much more dispersed, which means that the working time needed to buy goods for these wages could also be considerably shorter. The comparison of 2007 and 1997 Figure 12: Working time to buy goods and services by recipients of first decile, median and ninth decile gross wages, Slovenia, in 1997 and 2007

Working time to buy food

Working time to pay for services related to housing

0 20 40 60 80 100 120 140 160 180

1997

first decile 2007 1997

median 2007 1997

ninth decile2007

Brown bread (t-850) [kg]

Unboned beef [kg]

Apples, table [kg]

Frozen mixed vegetables [kg]

0 2 4 6 8 10 12 14

1997

first decile 2007 1997

median 2007 1997

ninth decile2007

Water for households [m3]

Fuel oil, extra light [l]

Electricity, day time tariff [kWh]

additionally reveals certain changes that occurred in this decade. If the working time required to buy a certain good increased, purchasing power was decreased, as is the case with black bread, for the purchase of which a recipient of a gross wage of the first decile had to work for 24 minutes in 1997 and 33 minutes in 2007, which is a rise of around 40%; for a recipient of the median decile wage, this time increased by 37% (from 14 minutes in 1997 to 19 minutes in 2007), and for a recipient of the ninth decile wage, it increased by 32 % (7 minutes in 1997 and 9 minutes in 2007). If, on the other hand, the working time needed to buy a certain good decreased, purchasing power increased, as is the case with beef, for the purchase of a kilo of which a recipient of gross wage of the first decile needed to work for 2 hours 40 minutes Working time to buy goods related to transport

Working time to buy clothing, footwear and goods related to hygiene and health

Working time to pay for services and eating out

in 1997 and 1 hour 55 minutes in 2007 (down by 28%), compared with a 30% reduction of the required working time for a recipient of the median decile gross wage (1 hour 34 minutes in 1997 and 1 hour 6 minutes in 2007), and for a recipient of the ninth decile wage, a reduction of 32% (47 minutes 1997 and 32 minutes 2007). It can be concluded that in those cases where the purchasing power decreased, it decreased more for the gross wage of the first decile than for that of the ninth decile; and when the purchasing power increased, it increased less for the gross wage of the first decile than it did for the gross wage of the ninth decile. This is a more detailed analysis of the consequences of increasing disparities between the recipients in terms of the level of gross wages; it is also revealed in the Figure 12.

Source: SORS; calculations by IMAD.

0 2 4 6 8 10 12 14 16 18

1997

first decile 2007 1997

median 2007 1997

ninth decile2007

Petrol unleaded, 95-oct. [l]

Urban passenger transport by bus

0 1000 2000 3000 4000 5000 6000

1997

first decile 2007 1997

median 2007 1997

ninth decile2007

Women's raincoat, lined

Men’s shoes, leather [pair]

0 50 100 150 200 250 300

1997

first decile 2007 1997

median 2007 1997

ninth decile 2007

Dry-cleaning a suit

Fashionable men's haircut

Regular theatre performance

Pizza (classic)

retirement before the full pensionable age), the age structure of new pensioners has changed.

In the structure of women pensioners, the most obvious was a drop in the share of pensioners aged up to 54 and a rise in the share of pensioners aged up to 60. In the structure of men pensioners, the share of pensioners aged up to 60 dropped and the share of those aged up to 65 increased. Similar trends were also perceived in other groups of pensioners. Raising the pensionable age contributed to slower dynamics of new retirements and thereby also the growth in the total number of pensioners eased; in the long-term, this also holds back the deterioration of the employed to pensioners ratio.

Compared to net wages, the level of net old-age pensions has decreased, as throughout the period pensions grew at a slower rate than net

wages. The trends in other types of pensions i.e.

disability and survivors’

pensions have been similar. Recently, they have also been affected by the amendments to the Personal Income Act for 2005 and 2007. In 2005, personal income tax was cut by approximately the same amount for all and consequently the net wage rose by 2 p.p. more than the gross wage. In 2007, mostly high wages were disburdened by the personal income tax, but on average the net wage still rose by 2 p. p. more than the gross wage. As the adjustment mechanisms did not foresee the adjustment of the pension rating base and pensions to the changed average income brackets, the ratio of net pension to net wage deteriorated even further.

The distribution of beneficiaries of gross old-age pensions in terms of the level of pensions

reveals smaller disparities than were recorded for wages; at the end of 2007, the inter-decile coefficient for

In document Summary ... 11 (Strani 32-36)