As noted above, the main types of income of the population are wages (together with various accruals and additional payments), income from entrepreneurial activities, social transfers, income from property, etc.
I. Salary - this is a regularly received remuneration for manufactured products or services rendered, for hours worked, including payment for annual holidays, holidays and other unworked hours, paid in accordance with labor legislation and collective labor agreements. Its source is the payroll. This part of the monetary income of the population includes all types of remuneration in cash and in kind for hours worked and unworked, incentive payments and allowances, compensation payments related to the mode of work and working conditions, bonuses and one-time incentives accrued by an enterprise, institution, organization of any form of ownership. payments, as well as payments for food, housing, fuel, which are of a regular nature.
An integral part of wages is wage, or wage rate, is the price paid for the use of labor. Economists often use the term "labor" in a broad sense, including wages:
ü workers in the usual sense of the word, that is, "blue and white collars" of various professions;
ü specialists - lawyers, doctors, teachers, etc.;
ü owners of small businesses - hairdressers, repairmen of household appliances and a variety of different merchants - for labor services provided in the implementation of their business activities.
It is also important to distinguish between monetary, or nominal, And real wages. Rated salary is the amount of money received per hour, day, week, etc. Real Wage is the quantity of goods and services that can be purchased with nominal wages. Real wages are the "purchasing power" of nominal wages. It is quite obvious that real wages depend on nominal wages and the prices of purchased goods and services.
Wages are the leading motive that motivates workers to work. It is in developed countries more than half, and in the US - up to three-quarters of the total income. Assessing the concept of wages from the standpoint of income policy, it should be recognized that it contains a more rigid principle than the well-known principle "to each according to his work." When it was used in countries with a planned-distributive economic system, the evaluation of the quantity and quality of labor was in the first place. Therefore, the miner could claim higher wages. In countries with or transitioning to a market economy, the assessment of income from labor as a factor of production is used, which is associated not only with the quantity and quality of labor, but also with the market conditions for its use. You can work hard, but if the product of labor is not realized for some reason, then there will be no income.
Another part of wages is military pay, which is paid from the funds of the federal and local budgets and includes the amount of basic and additional types of accrued cash and clothing allowances for military personnel that are part of ministries and departments that provide reports in an open manner.
II. Business income - this, in a broad sense, profit, equivalent income or mixed income, determined minus paid interest and rent, and with the addition of property income received.
Whereas in relation to corporations the directions for the use of profits are sufficiently clearly defined, in relation to enterprises owned by individuals, it is difficult to distinguish between the assets and liabilities of the enterprise and the assets and liabilities of their owners. Accordingly, it is difficult to classify individual types of income. Thus, if we consider a family trading enterprise, the owners of which are also its employees, the question arises whether to consider the income of the owners as wages or as entrepreneurial income. In such enterprises, family members perform unpaid work, and the owner and entrepreneur are combined in one person, and therefore income from labor activity is inseparable from the income of the owner or entrepreneur. Their income is considered as mixed income.
Under mixed income refers to the income of unincorporated enterprises owned by households individually or in partnership with others and in which the owners and other members of the households can work without being paid.
III. Social transfers are a purposeful operation of a redistributive nature, which consists in the transfer of resources in cash and in kind by state and non-profit organizations to the population, mainly on a gratuitous basis.
Tasks , solved by the system of social transfers can be divided into several groups:
ü providing the population with socially significant services;
ü reducing the gap in the level of material support of working and non-working members of society, raising the living standards of various social groups of the population not involved in the labor process;
ü mitigation of the negative external effects of the period of adaptation of the population to market conditions - the growth of poverty and poverty, unemployment;
ü ensuring the required quantity and structure of the reproduction of labor resources.
Social transfers can take the form of:
ü social welfare, systems of social benefits and services provided by the state to socially vulnerable groups of the population on the basis of a means test. Assistance is received by low-income strata of the population, whose incomes are below the poverty line, as well as persons who find themselves in difficult life situations. Through the institution of social transfers in the form of social assistance, the concept of a minimum guaranteed income is being implemented. In a broad sense, social assistance also includes various forms of voluntary public charity in favor of socially unprotected segments of the population. It is provided by trade unions, religious and other public organizations;
ü social guarantees, which include a system of socially significant benefits and services to all citizens without taking into account their labor contribution and means test. At the same time, the principle of distribution according to needs is implemented, taking into account the resource capabilities of society, which determines the measure of these guarantees;
ü social benefits, representing social guarantees to certain categories of the population and having a universal character;
ü social insurance, which are designed to protect the population from various social risks leading to loss of ability to work and income - diseases, work injuries, occupational diseases, accidents, childbirth, unemployment, old age, death of the breadwinner. The peculiarity of this form lies in a kind of preliminary accumulation of funds, including sometimes personal ones, forming insurance funds for the purpose of subsequent payments of certain funds upon the occurrence of an insured event.
The most extensive part of social transfers in the Russian Federation is pensions, allowances, scholarships.
Pension - this is a form of regular cash payments provided in case of partial or complete disability, loss of a breadwinner, professional risks. Pension provision is formed in a single social space, including a single procedure for calculating and reviewing pensions, accumulating insurance funds and their payments in a single off-budget Pension Fund.
Benefit- This is a form of cash payments, regular and one-time, in cases of partial or complete disability, difficult financial situation, support for families with children, death of relatives provided for by law. There are also temporary disability benefits, family and child benefits, unemployment benefits, maternity benefits, etc.
Scholarship – this is a form of regular cash payments to students of higher, secondary specialized and students of vocational educational institutions studying off-the-job.
In addition to direct cash payments to the population, social transfers include financing current costs in health care, education, culture, etc., as well as subsidizing enterprises and organizations that provide services to socially vulnerable groups of the population.
IV. Property income – These are the amounts paid by enterprises for the use of economic resources. Consider income from providing firms with capital, land and other natural resources, and cash.
Income from ownership of capital - dividends n about shares. They can be considered as interest income on real capital acquired by the enterprise with money provided by the person who bought the shares. At the same time, the owner of shares can be considered as the owner of a share in the authorized capital of the enterprise, and then the dividend can be interpreted as part of the income from providing this share for the use of the enterprise. We will stick to the second interpretation.
Income from ownership of land and subsoil is rent, those. received by the owner for their transfer for use to other institutional units - enterprises. Land and subsoil owners provide them on the basis of contracts or leases under which users undertake to pay income.
Households receive part of their income by lending money capital in the form of interest on loans. By attracting money capital, entrepreneurs thus get the opportunity to use the real factors of production and receive income associated with this.
Percent - it is the price you have to pay to raise money. It is thus the income from the ownership of cash received by the owners of deposits, bonds, securities, borrowed funds and some other similar assets.
Data characterizing changes in the quantitative ratios of the elements of the total income of the population are given in Table 11.2.
Table 11.2 Structure of monetary incomes of the population of Russia, %.
These data show that due to a significant increase in the share of income from entrepreneurial activity and income from property in the composition of the population's income, there was a decrease in the share of the main income of hired workers - wages. Receipts in the form of social transfers remain practically stable in terms of their share in the total amount of income. At the same time, it should be noted that in absolute terms, all types of income tend to grow. This is due to changes in economic policy, but the fall in the share of wages can hardly be considered economically feasible. Only the course towards the growth of wages, the accelerated rate of increase in its absolute size will help to increase the efficiency of labor, and, consequently, the economy as a whole.
In our time, no nominal structure, the economy of the state, the activities of individuals, or even any given family, can function productively without an analysis of the income, the actual receipt of which supports their livelihoods. The concept of income is complex and ambiguous, even in the legislation of the Russian Federation there is no single term, since it has an extremely wide application. If we consider the term in everyday life, then it can be defined as money received for the work done, labor - which is not entirely true. There are a lot of definitions of income, it includes many aspects that characterize it from different angles, so it is impossible to give an unambiguous answer. The term can describe both the profit of commercial and industrial institutions from their organizations, be gross at the state level, or denote cash receipts from an individual.
The concept of income is ambiguous
Therefore, we distinguish three groups of income:
- Personal, individuals - these are the funds that citizens receive in the form of scholarships, allowances, salaries, pensions, fees, lottery winnings. Money left by inheritance, proceeds from the sale of one's own goods and other personal valuables are also included in this category.
- State- money that came to the treasury through the collection of taxes, duties and other foreign trade operations.
- Enterprises- money received from the sale of goods, loans or other completed transactions, services in favor of increasing the capital of the institution.
Based on this, the most accurate definition is the following:
Income- these are all monetary or material values \u200b\u200bthat come to the state, individuals, legal entities or going to the company at the end of some labor or entrepreneurial activity, for some time. Income is assumed not only in cash, but also in kind (jewelry, products, real estate, goods), like shares, securities.
Income of individuals
Population income
We can say that this is a part of the national income formed in the process of production. Its goal is to meet the needs of the population, both materially and spiritually. In addition, this money compensates for physical and mental work, that is, all labor costs invested at the time of production. Only cash receipts are distributed unevenly among the people in a market economy. Such inequality is directly reflected in social instability in society. That is why the state is pursuing a social policy, where it redistributes income between individual segments of the population. Cash payments are necessary to improve the social situation, create a family, raise offspring and ensure stability in the life of any citizen. A person goes through several stages in life, and each of them has its own income-generating opportunities, in which one should not forget about saving.
I would like to note that if we talk about family income, then this means the following:
By creating a new cell of society, a person automatically becomes an accomplice in the formation of the family budget. From the moment of the birth of the family, all personally earned funds from the spouses become joint. The budget includes not only income, but also all sources that give profit. The family budget is nothing more than a combination of assets and liabilities of both parties.
family income
Population income divisions
What is personal income? It follows from the textbooks that this is a certain amount received over a certain period of time. The individual can dispose of this money at will - to spend or leave for accumulation. It is customary to classify the money received into:
- Rated, money independent of price fluctuations and taxation.
- Cumulative, the total amount including in-kind and cash income coming from all flows.
- Available, the amount remaining after the write-off of taxes and other contributions. That is, this is the money that remains for food and personal use.
- Real, the same nominal only taking into account tariffs, and inflationary price fluctuations.
- Really disposable, those that remain based on the cash income of the current period, minus mandatory payments and taxes, adjusted for the consumer price index.
Everyone has heard the concept of "personal income", but few perceive it as an important macroeconomic indicator of the social situation in the country. Rather, as a common phrase used in everyday life. In fact, this term carries a deep economic meaning and performs certain functions. In this article we will understand - what are, and also, what is its essence, what are the types and sources of formation of personal income and how to calculate it?
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Personal income- this is the total income of individuals in kind and in cash, which comes in the form of wages, dividends, interest on securities and other things, and is used for personal purposes to ensure a certain standard of living.
In other words, personal income is all the funds that a person receives in cash or in a non-cash way as remuneration for work, dividends, rents, gifts, etc. and use it at your discretion. Calculated before the deduction of taxes on personal income, transport and land tax.
There are the following types of personal income:
- Nominal- shows all income received by an individual before taxes and other obligatory payments.
- disposable- funds received that can actually be used for purchases and savings.
- Real is disposable income adjusted for the price index, i.e. reflects the true picture of how many goods can be purchased in a given period of time for the amount of disposable income.
Personal income as a macroeconomic indicator
The very definition of "income" appeared in everyday life only with the beginning of monetary relations. Material values that existed before could not be used as savings. Only with the advent of money, even poor citizens got the opportunity to accumulate funds. This is how personal income began to form.
Conventionally, the amount of personal income can be divided into three parts: taxes + consumption + savings. Thus, after paying all taxes, an individual faces the question of how it is more profitable to distribute the remaining amount between consumption (purchase of any goods and services) and accumulation of funds.
This problem should not be neglected, since the direct connection between macro- and microeconomics is nowhere else so solid. After all, the proportion of "consumption-saving", with which the bulk of people share their income, can destroy, and sometimes even revive the country's economy.
This proportion reflects the level of balance of macroeconomic processes in the country and shows the degree of accumulation of savings and consumption expenditures of the population. The main task of the market economy regulation mechanism is to persuade citizens to make decisions that are beneficial for society.
The largest part of personal income is used for current expenses: buying basic necessities, paying for housing, education, and so on. This is of great importance for macroeconomics, because most of the income returned to the economy in the form of consumer spending of citizens.
The portion of income left after paying taxes and spending on consumption is called "savings" - this is future consumption spending. That is why it is extremely important for the government and businessmen to know the level of the savings part of the population's income. If it is high enough, then the population of the country believes in the stability of the national currency.
Essence
The goal of any economic reforms should be to improve the material well-being of the country's population. In fact, income is the amount that an individual receives for a certain period of time (for 1 month, 1 year). The level of demand and consumption directly depends on the level of income of the population.
Personal income includes all receipts of funds to an individual - both in cash and in kind. The monetary form includes almost all cash receipts - pensions, interest, bonuses, etc. To natural - services, material values and some payments of social funds.
There is also a distinction between primary and secondary income. The primary ones include profit, wages, rent, and the secondary ones include pensions, scholarships and other payments from state social funds.
Functions
There are five main functions of personal income:
- reproductive- this implies a level of remuneration for work at which the employee will be satisfied and will not be distracted by side jobs. Accordingly, the professionalism of such an employee will not be lost, which positively affects the dynamics of the enterprise's development.
- status- this function is important first of all for the employee himself. This refers to his position, occupied in the structure of the enterprise both vertically and horizontally, in accordance with the salary.
- Stimulating function- when the salary is tied to the results of work. This encourages the employee to do better work and maintains his enthusiasm.
- Regulatory– helps the employer to regulate the supply and demand of vacancies at the enterprise, quickly and efficiently fill vacant vacancies.
- Production share- Regulates the share of wages included in the price of manufactured products. The larger the wage fund, the higher the wages at the enterprise, respectively, the higher the satisfaction of employees and the general social situation at a particular enterprise.
Sources of formation
There are many sources of formation of personal income of citizens.
Below are the main ones:
- business profit;
- remuneration for work (wages, bonuses);
- rent (renting out movable or immovable property);
- sale of property;
- subsidiary farm (profit from the sale of surpluses);
- state payments (pensions, etc.);
Indicators
Income indicators include personal income, personal expenses and consumer credit.
Personal income is the totality of all material receipts to citizens. These are salaries, scholarships, dividends and so on.
Personal expenses are divided into three components:
- service costs;
- spending on durable goods;
- spending on non-durable goods;
The higher the population's spending, the higher the exchange rate of the national currency and the more stable economic growth.
consumer credit- its index shows consumer debt on credit cards, on loans for goods and services. However, it does not have much impact on the market.
Differentiation and distribution
Differentiation of personal income- these are differences in the level of income of the population, reflecting the social fragmentation in society, the nature of its structure.
There are four main principles of income differentiation of the population:
- egalitarian;
- market;
- on accumulated property;
- privileged;
In reality, these principles are intertwined and modified depending on current market conditions.
The following causes of income inequality are distinguished:
- abilities of an individual citizen. Everyone has different abilities and talents. Thus, someone manages, thanks to his talent, to achieve a promotion, while another who does not have such an ability does not.
- Education and training. People themselves choose their future profession and specialty and, depending on the level of training, they achieve or do not achieve success and high incomes.
- Employment Discrimination may result in the salary level for a particular position being too low or too high compared to a similar position in another company.
- Professional tastes and risk. People who are willing to do unpleasant work for many hours can earn more. Some combine two or more jobs to earn more income.
- Distribution of wealth. Wealth is the possession of assets accumulated by a person in the form of bank deposits or property.
- Connections and luck.
So, the concept of "personal income" has a significant macroeconomic role in shaping the country's economy as a whole. An important condition in any country is to reduce the differentiation of incomes of citizens, which is impossible without state intervention.
The mechanism for regulating differentiation was created to ensure a minimum decent lifestyle for a person, as well as to resolve contradictions between gifted people and the availability of wealth used to obtain their income.
Wage forms the bulk of consumer income. It is defined in the broad and narrow sense of the word. In a broad sense, this term includes the wages of various categories of workers, actually workers of various professions and highly qualified specialists, whose work requires large expenditures on education and special training.
In a narrow sense, a salary is a wage rate, that is, the price for using a unit of labor for a certain time (hour, day, month). Such a distinction makes it possible to determine the general (average) level of remuneration and the actual salary.
The general level of wages depends on the quantity and quality of capital, the quality of labor, and production methods. The overall level of wages rises when the supply of labor is limited compared to other factors and fixed demand.
Wages in competitive labor markets.
Competition model, its characteristic features:
a) a large number of competing firms on the demand side and numerous offers of the same type of labor;
b) neither firms nor workers dictate wages;
c) the level of wages is constant for an individual firm and an individual worker.
Monopsony model, its characteristic features:
a) those employed in a particular type of labor work in the same firm;
b) other use of labor is associated with geographical movement and retraining;
c) the firm dictates the salary.
Bilateral monopoly model:
a) on the one hand, a monopsonist-buyer of labor;
b) on the other hand, a monopolist-seller of labor represented by a trade union;
c) in this case, the salary approaches the competitive level.
Differentiation of wage rates is determined by:
professionalism and diverse abilities;
differences in the types of work that differ in their attractiveness;
imperfect competition in the labor market.
Highly skilled labor is rewarded for a significant contribution to profits and compensates for past efforts associated with the formation of human capital (education, training, health). People with rare abilities receive a talent rental bonus in addition to their pay.
Interest as return on capital. Capital can be thought of as a value that generates a stream of income.
Percent is the return on the use of capital, which in practice is represented by:
a) in the form of loan interest, if the capital has a monetary form;
b) in the form of property income, if the owner of the capital is part of the unincorporated sector;
c) in the form of corporate profits, if the owners are shareholders.
When determining the percentage, it is important to emphasize the role of the time factor.
Profitability of loans can be expressed as the rate (rate) of interest =
The rate of interest must not exceed the rate of profit, since the source of interest is profit. The actual level of the interest rate is determined by the ratio between supply and demand for loan capital in the money market. Factors affecting the size of the interest rate: the degree of risk in providing a loan; terms; degree of restriction of conditions of competition in the money market.
There are nominal interest rates (in current prices) and real (inflation-adjusted). Only real interest rates matter in the economy for decision making.
The role of the interest rate:
a) a decrease in the interest rate leads to an expansion of production, and an increase in it leads to a curtailment of production;
b) the distribution of funds between the most productive industries.
The accumulation and investment of capital is carried out with the aim of generating income in the future. An effective investment project is a project, the annual income from which is not lower than the interest rate for any capital asset, including the bank interest rate. Calculus today, the current analogue of the amount of future income from capital assets paid after certain periods at the current interest rate is called discounting. Based on the bank interest rate, the income in the form of interest is calculated, which can be received from future investment projects. Discounting is carried out according to the formula:
D = 
;
where D is the current discounted value of the asset; D t is the annual future return on an asset invested for a period equal to t years; r is the rate (norm) of bank interest.
Investment decisions are justified based on the price of investment goods on the market, the interest rate, the level of annual income from the use of these goods, the price of their possible sale at residual value.
Entrepreneurial income (profit)- remuneration of the entrepreneur for the performance of his functions: a) the combination of factors of production into a single production process; b) introduction of new products and technologies; c) the risk associated with investing your funds. This is the part of the profit that remains at the disposal of the entrepreneur after paying for the loan. As you know, part of entrepreneurial income is called normal profit. This is the minimum income to keep an entrepreneur in the industry. But if the total income exceeds the total costs (including normal profit), then this excess in the form of economic profit goes to the entrepreneur. Zero economic profit is a consequence of a static economy and free competition. But in real life this is not the case. Any market situation is characterized by both a certain uncertainty as a result of economic dynamics, and a certain monopolization of the market, which generates economic profit. The desire to get it pushes the economy to further development.
Profit functions:
It contributes to the efficient use of resources, which can be shown by the logical chain: profit - innovation - investment - employment growth, output - prosperity.
Stimulates the most efficient distribution of resources among alternative industries.
Rate of return = 
If the rate of profit rises, then this is a signal for the expansion of the necessary sphere of production.
Economic rent is the price paid for the use of land and other natural resources, the supply of which is limited (inelastic).
Despite the conceptual differences regarding rent, economists emphasize the heterogeneity of land in terms of their productivity, and hence the differences in demand for them.
R 
Figure 9.2 - Demand and supply of land
If you plot demand (D) for land and supply (S) on a graph, then the supply will be inelastic (Fig. 9.2). Demand, in turn, is the only factor that directly affects rent. The better the plot, the higher the demand, and hence the greater the rent.
Types of rent. Differential rent exists in two forms. Differential rent I arises from the closer location of land to the market, as well as greater fertility compared to the worst plots. It is assigned by the landowner. Differential rent II is formed as a result of intensive farming due to additional capital investments and is appropriated by the tenant of the land during the duration of the lease.
monopoly rent- rent received for exceptionally suitable conditions for the production of agricultural products.
Absolute rent is paid on all plots of land, regardless of location and fertility, for the landowner does not lease land free of charge.
The price of land is closely connected with rental relations. The landowner can sell the land, provided that the amount received by him is not less than the income in the form of interest received from investing this amount in the bank.
As a result, the price of land is capitalized land rent and is determined by the formula:
In the extractive industry, differential rent is generated by differences in labor productivity and cost, which are due to the unequal wealth of mineral deposits, their depth, etc. Prices for products are set according to the worst production conditions (at the same time, they receive a normal profit). In the best areas, where minerals are mined at lower economic costs, income is generated in the form of differential rent, which remains with the owner of the land.
On fig. 9.3a,b the differential rent is shown using the curves of marginal cost (MC) and average total cost (ATC) for two oil companies.
R 
Figure 9.3a - Presence of differential rent
Figure 9.3b - Absence of differential rent, since the price of oil and the cost of its production (ATS) in conditions of deeper reservoirs coincided
