Specifics of Formation and Symptoms of Inequality in Ukraine

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Specifics of Formation and Symptoms of Inequality in Ukraine

Journal Title: Демографія та соціальна економіка - Year 2013, Vol 20, Issue

Abstract

The traditional understanding of inequality as uneven distribution of limited resources of society justifies its objective nature and exacerbation of manifestation with increasing of resource restrictions. Today, the world community understands inequality as a lack of equal opportunities for development. This shifts the emphasis from income inequality to inequality in access to social and political freedoms. This means that vulnerable groups should have better access to public services for achieving equal opportunities. Otherwise, inequality in society is the result of unequal opportunities and absence of social mobility. Transition from planned to market economy implies intensification of economic inequality as income begins to reflect the individual labor and productiveness. However, in Ukraine, as in other post-Soviet countries, inequality was caused by several factors, primarily non-economic. With economic factors of growth of inequality (differentiation in salaries, the emergence of new sources of income, etc.), there was a rapid redistribution of public property for the benefit of a small layer of the society. This played a key role in the formation of economically unjustified component of inequality. Traditionally, the system of social transfers has a great importance in the policy of alignment and mitigation of the effects of rising inequality. However, in Ukraine, this influence was largely neutral, and sometimes it even intensified inequality. Today, situation has not changed much – less than half of social transfers (like benefits and privileges) are given to those who really need it. The current system of taxation places middle income groups, which should form the core of the middle class, in the most disadvantaged position. An attempt to move to a more progressive tax scale can increase the pressure on the middle class of society as a result of considerable proportion of unregistered income. The modern Ukrainian society is divided into 2 groups: 95% of the population is distributed smoothly according to level of income and consumption, with few gaps, and 5% of the population, which have a different level of consumption, cardinally different from the average standards. There are two main issues in the context of the formation of economic inequality: employment does not protect from poverty, and higher productiveness does not guarantee higher income. Growing depreciation of objects of social infrastructure and inadequate financing of free services has become the main problem of inequality, which concerns access to social services. In such situation vulnerable groups of people are in the most difficult position. In addition, the availability of social services is shifting in the direction of the settlement vector, putting residents of small towns in a disadvantaged position. Thus, the basic manifestations of inequality in the Ukrainian society are caused by violation of the principles of social justice. To change the situation means, first of all, to make inequality economically reasonable and ensure equal access to social benefits for all layers of society.

Authors and Affiliations

L. M. Cherenko

Keywords

EP ID EP287225
DOI 10.15407/dse2013.02.060
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