The market principle of income generation is essentialdifferent from administrative. In its simplest terms, incomes in a market economy are understood as means, expressed in monetary or in-kind form, that are received at the full disposal of an individual over any fixed or fixed period.
Based on this statement, you can open anddifferences between the methods of generating income. The main one is that the market mechanism takes into account not only labor costs, but also the effectiveness of participation in market competition.
It is considered fair thatwhere income comes not only from work, but also from competitive advantages and profits derived from them. Indirectly, this factor significantly expands the list of incomes themselves, which one or another subject can receive.
Modern science explores the principles and mechanismsincome generation based on the existing factors of production: labor, land, capital, entrepreneurial talent. Labor, as a rule, brings income in the form of wages, capital - in the form of interest, land - in the form of rent.
When using the functional approach, remuneration and its size depend on the efficiency of use of the factors of production.
For an overall assessment of the nature, level and dynamicsincome, the classification methods are applied, which, despite all the differences among themselves, distinguish the following types as traditional: disposable income, nominal and real income.
Disposable income is used, as a rule, for personal consumption and represents the amount received from the deduction of taxes from the total nominal income.
Real income is the amount of goods and services that a particular entity can acquire for any period, depending on the prevailing price situation in the consumer market.
And finally, the nominal income is formed from all the money received by someone for the entire established period.
Most of the income is of labor origin,and there is no particular difference between the worker at the machine at the plant or the manager of the enterprise, or the broker at the exchange. The problem is that it is quite difficult to select the labor component, it is sometimes impossible, therefore its parameters are often of an estimated, conditional nature. The reason is that in some types of activity, unpredictable factors affect risks, such as risks, luck, market dynamics, and so on.
In most cases, nominal income is formed primarily from salaries. For example, in some countries its share in national income rises to 75% of its total value.
As well as distinguish nominal income andreal, distinguish and relevant types of salaries: nominal and real. The first of these represents the entire amount of money that is paid to the employee for his direct work in the enterprise. According to its size traditionally judged on the welfare of man and his potential. At the same time, according to its value, one cannot say definitely about the level of consumption. To reflect this indicator is the real salary, which is defined as a certain set of real goods and services that a person can afford to buy in the consumer market, taking into account its dynamics, the situation and the nature of the instantaneous state. This establishes a natural, directly proportional dependence of real wages on the amount that represents nominal income, and its inversely proportional dependence on the level of market prices for goods and services.
In addition, the value of the salary is determined andsuch “intangible” factors as the level of professionalism, the nature of the work itself, based on its emotional and psychological tensions, the degree of development of the enterprise’s innovative potential and its introduction into every workplace, and ultimately, the quality of work. Consequently, the reflection of nominal income in the wages of workers is indirect and calculated.
