Baltic Journal of Economic Studies (Nov 2016)
THE ANALYSIS OF THE STATE AND DEVELOPMENT PROSPECTS OF THE MIDDLE CLASS IN UKRAINE
Abstract
The purpose of the paper is to study and represent the current state of the middle class in Ukraine, the problems of its formation and development prospects in the future with the definition of the complementary set of internal and external factors of its formation. Methodology. The survey is based on statistical data from open official sources, which makes it possible to confirm the thesis of the critical proportion of the middle class in Ukraine. Besides, the data are obtained from electronic sources, the State Statistics Service of Ukraine. During the study, the paper uses analytical articles on the economic development of the middle class in Ukraine. The results of the survey shows that the middle class is critically low for stable functioning of Ukraine’s modern economy. One of the main problems of the middle class development is the absence of state support of small and medium-sized businesses. The government with the repressive model of the economy in relation to business-oriented monopolization was formed in Ukraine. The distribution of the «shadow» model of social and economic relations leads to the limitation of legal opportunities of employment and income. Besides, it complicates the development of small and mediumsized businesses. As a consequence, the number of entrepreneurs and small business owners are constantly increasing, but due to the absence of a favorable business climate a significant number of small businesses were forced to move into the shadow. The peculiarity of the formation of the middle class in Ukraine is that its social basis in contrast to Western Europe is not the owners, but employees. We have a unique situation, when most of the highly skilled workers (the representatives of the spheres of education, health, public administration), which should be the core of the middle class, in terms of income are on the verge or below the poverty line. The level of wages of such specialists does not even correspond to the national average. Practical implications. On the way to the successful modernization of Ukraine in the short and long-term priority business and investment climate is favorable. This, in its turn, cannot be implemented without the improvement of the state management system in the field of entrepreneurship. Policies to promote the formation of the middle class in Ukraine should rely on the support of the working population, providing outstripping wage growth, strengthening the position of highly skilled workforce, as well as supporting entrepreneurship. The formation of the middle class in Ukrainian society must be realized not through the creation of principally new social grouping, but through the gradual transformation of corresponding social groups and their way of functioning. Value/originality. The survey is conducted to clarify the concept of the status of the middle class in Ukraine. The reasons for the low level of the middle class in Ukraine are identified on the basis of the data obtained. The resulting research findings make it possible to propose measures for the development of the middle class in Ukraine, namely – the development of small and medium-sized enterprises and the support of working population, considering the interests of the middle class.
