Rossiskaya Gazete reports that Russia has caught up with Europe for the first time in terms of wage-to-GDP ratio. At the end of 2006, the ratio of the total wages of those employed to national GDP reached an all-time high of 33.3%, up from 23.6% in 2000.
According to EuroStat figures, the wage-to-GDP ratio in European countries has shown little change, if any, over recent years, with some nations even reporting a downward trend, as you can see from the table below:
While this is bad news for local companies who are finding their staff costs rising, often without an accompanying rise in productivity, marketers targeting Russian sales are celebrating. Growth in wages means more money spent on consumption.
The initial reason for the growth has no doubt been due to the rise in global demand for energy and raw material exports; however customer demand, along with investment demand has recently emerged as a major driver of the Russian economy.
The Ministry for Economic Development and Trade finds that due to this the economy is becoming less dependent on the export of energy resources, so even with oil prices sliding, Russian GDP continues to grow. They believe that accelerated wage growth can be sustained for some years.