The Importance of Fixing the Poverty Threshold for the Formation of a Sustainable Economy

Abstract

Implementing the concept of sustainable development in practice requires an adequate definition of the boundary (threshold) of poverty. Poverty is a twofold phenomenon, on the one hand, it is the result of the current wage system; on the other hand, it is the basis for the formation of the labour force and its goals in the labour market in the future, i.e. in fact, the possibilities of sustainable economic development. Based on this basis, the paper analyses the approaches to determining the poverty threshold used in foreign and domestic practice, assesses the possibility of their use for an actual assessment of the poverty threshold in Russia in modern conditions, considering the challenges facing our economy. The current economic situation in 2020-2021 in connection with the COVID-19 pandemic and the unfolding inflation has sharply exacerbated the problem of poverty and, in our opinion, confirm the incorrectness (within the framework of the goal of forming a sustainable economy) of using the median wage to fix the poverty threshold.