Russia's minimum wage and subsistence minimum to be equal since 2019

 Russia's minimum wage and subsistence minimum to be equal since 2019

Russia's minimum wage will be gradually increased and will reach the subsistence level, the Russian Minister of Labor Maxim Topilin said.

He specified that the minimum wage ratio to the subsistence level will reach 73% by July 1, 2017, while the minimum wage will be increased by 3% to 7.8 thousand rubles.

In the second stage, on 1 January 2018, the minimum wage will rise from 73% to 90% of the subsistence level, 25 billion rubles will be provided from the federal budget to compensate the growth of salaries of state employees.

The final stage will start on January 1, 2019, when the minimum wage level will be equal to the subsistence level.

Topilin did not explain how much money the implementation of the bill will require from the budgets of all levels.

The vice-rector at RANEPA Alexander Safonov, speaking to a correspondent of Vestnik Kavkaza, noted that we can only welcome the time-bound plan for equalizing the minimum wage and the subsistence minimum level. "Of course, it is worrying that it will be stretched until 2019, but, in any case, this decision should be welcomed," he said.

Since this decision was taken at the level of the president and the prime minister, the Ministry of Finance will have nothing left to do but to implement the adopted plan. "The department will seek funds to increase the minimum wage. But if for the commercial sector such a decision does not require additional financial resources, then the situation with the budget sector is completely different," Alexander Safonov said.

The vice-rector at RANEPA recalled that they have realized the project of bringing the minimum wage to the subsistence minimum in Russia for more than 20 years. "The most important thing is the retention of minimum wage at the level of the subsistence minimum. There was already a situation when in 2007 the ratio of minimum wage and subsistence minimum was 87.9%, and then the index rolled down," he pointed out.

A professor of the RANEPA Chair of Economics and Finance of the Public Sector, Lyudmila Pronina, in turn, noted that the decision of the government to bring the minimum wage to the level of the subsistence minimum is certainly correct, and the authorities have been thinking about it for a long time. However, she warned that such a long-term implementation of this initiative requires parallel adjustment of both values ​​depending on the current economic situation and, accordingly, the indicators of the living standards.

Ludmila Pronina also drew attention to the fact that it is necessary to avoid a formal approach in the issue of determining the subsistence minimum. "These indicators are important for pensioners, children, and so on, so they cannot be considered only as figures," the expert stressed.

According to her, the regional aspect is also extremely important. "The regions set their own living wage. It would be good if they focus on the dynamics of the increase in the minimum wage announced by the Ministry of Labor, but if they fail, this is fraught with budget problems," Ludmila Pronina concluded.