Wage Differentials as Serbia's #1 Culprit

I was recently quoted in a NIN magazine article on regional wage inequalities in Serbia (NIN is a Serbian weekly). I simply pointed out that wage statistics in Serbia do not reflect regional differences in prices and that it is not the same to live off 10,000 dinars in Belgrade, where one is faced with all kinds of expenditures - ranging from central heating to public transport and off 10,000 dinars in a municipality in the south, especially if this municipality is rural and a great share of household consumption comes from natural production. So, of course people earn more in Belgrade. Nevertheless, the article concludes that life in Belgrade is "easier" amid higher living costs, and that Serbian citizens would rather be unemployed in Belgrade than employed in one of Serbia's small municipalities. Despite the many generalisations inherent in this journalist's statement, I believe it does a good job of reflecting Serbian reality. However, my statement is also true, this reality has nothing to do with wages. Being unemployed in Belgrade certainly won't make you more financially solvent. Although money provides access to all kinds of goods and services that can improve our living standard, we all know that it is the so-called public goods and services, such as education and health, as well as abundance of other social infrastructure and opportunities that makes people rush over to Belgrade, especially the young.

I don't blame the journalist for arguing that the wage differential is what drives people out of places. There are virtually no indicators for measuring quality of education or health care in different regions/municipalities of Serbia - nothing for a journalist to refer to, so they are forced to treat wages as tools and indicators of development. It should by now be obvious to everyone that policies directed at the development of social infrastructure are the ones that will keep people in regions other than Belgrade and reverse the process of urbanisation. Higher wages will come on their own as opportunities and prospects increase.

However, I am concerned that the way journalists report on these "quality of life" issues spills over to the general population, and disfaction accumulates around wage differentials, workers' sindicates take over, negotiate higher wages and create macroeconomic pressures. Wouldn't it be more constructive to say: "Hey, people in this region have less university graduates because their primary schools are of poor educational quality and they have therefore not been able to accumulate the knowledge required to earn higher wages."? But don't worry, our statistics won't give anyone the luxury to back this up with evidence.

I like to think that if the info on regional differences other than wages was disseminted with the same fervour as the info on income differentials between regions and "classes", it would give people the ideal arguments they need to push for better quality of and more investment into certain publicly provided goods and services. It is about motivating others and giving them opportunities to invest in their health and education that societies evolve, not by creating short spells of dissatisfaction by reporting that someone out there is earning a higher wage than someone else. Wages are just an outcome, the main culprit is elsewhere.