The minimum wage will increase from the new year: the cost of living has caught up with the “poverty line”

In March, after the start of the SVO in Ukraine and the subsequent sanctions, a law was passed that allowed the government to independently set the subsistence minimum and minimum labor in Russia until the end of 2022, if necessary. As we know, it was necessary: ​​after a surge in inflation in the spring, the authorities had to increase these indicators by 10% from June 1 at once. As a result, the salary, less than which in the Russian Federation cannot be paid for a full working day and a full load, has risen to 15,279 rubles per month, and the all-Russian average subsistence minimum (“the minimum amount of income of a citizen necessary to ensure life”, as the law says) has increased up to 13,919 rubles per month.

The year 2023 is coming. Taking into account all the circumstances, it is unlikely that anyone can now accurately predict what will happen to the Russian economy in a few months and whether it will be necessary to again adjust the minimum wage and minimum wage in an emergency. But the government still proposes to establish some guidelines – two initiatives on this topic have been submitted to the State Duma along with the draft budget for the next three years.

minimum wage

Since the beginning of 2021, Russia has introduced a new procedure for calculating the minimum allowable earnings: for each next year it should be equal to 42% of the median salary in the country for the previous year. The median salary is calculated by Rosstat on the basis of PF data, and this is such a salary, less and more of which is received by 50% of the working population of the country. If everything went as planned, the minimum wage for 2023 should have been equal to 42% of the median salary in Russia in 2021. No coefficients that would take into account a possible strong rise in prices were included in that procedure for calculating the minimum wage. Well, what happened happened: back in the fall of last year, due to a strong rise in prices, it was necessary on the go, when adopting the budget for 2022-24, by a strong-willed decision, throwing aside the rules, to raise the minimum wage from January 1 to more than they were going to, size. And then raise it again, as we have already said – from June 1, 2022 …

The bill, prepared by the Ministry of Labor and submitted on behalf of the government, says in black and white: for the next two years, the procedure invented two years ago will be “suspended”. And the growth rate of the minimum wage will be calculated according to the formula “growth rate of the subsistence minimum plus three percent.” The indicator calculated in this way will be 16,242 rubles from the New Year.

The explanatory note to the bill states that the new approach will allow for “an accelerated increase in the minimum wage in 2023 and 2024.” The cost of living for the working-age population from January 1, 2023 will be equal to 15,669 rubles per month, which is 3.3% more than now. We add 3%, which means that the minimum wage will increase by 6.3%, that is, up to 16,242 rubles per month. This is 963 rubles more than now. Wages will increase for about 3.5 million people.

16,242 rubles a month is as much as 45.9% of the median salary for 2021, that is, the new, temporary rules are still more beneficial for workers, the government assures.

In the financial and economic justification, the following figures are also given: due to the increase in the minimum wage, only 20.6 billion rubles will be needed to increase the salaries of state employees in 2023, of which 5.3 billion rubles will come from the federal budget, and 15.2 billion from the federal budget. rubles – from the budgets of regional and municipal. At the same time, the Ministry of Finance expects that about a third of this amount will return to the treasury – in the form of taxes paid, which we take from minimum wages, and in the form of insurance premiums to off-budget funds. As for the non-state sector, it will have to find an additional 30 billion rubles somewhere.

These calculations, however, already mean little: they were made before referendums were held in the territories of the DPR, LPR, Zaporozhye and Kherson regions, as a result of which Russia agreed to accept these territories into its composition.

LIVING WAGE

And now let’s see how the government considered the subsistence minimum for 2023, on the value of which the size of the minimum wage now again depends.

Until 2021, this indicator was determined based on the cost of a consumer basket, which included a meager list of food products, and the cost of non-food products and services, mandatory payments and fees was calculated using conditional coefficients. That, without exaggeration, a beggarly consumer basket has long needed revision, but it has been put off. It is clear why: incomes below the subsistence level in Russia gave and give the right to social assistance from the state, and the amount of some benefits depends on this indicator. If you noticeably raise the minimum, there will be more people who are eligible for social assistance, and budget expenditures will increase.

But from 2021, the cost of living began to be calculated differently: for each next year – in the amount of 44.2% of the median average per capita income for the year preceding the year of establishment. The median income is such, less and more than which 50% of the country’s population has. True, as early as last year, strongly growing inflation, as in the case of the minimum wage, actually sent this rule to the basket.

What will happen in 2023? The usual procedure is expected and here it is “suspended” for the next two years in another bill submitted along with the draft budget. The PM calculations will have nothing to do with median income. The explanatory note explains that the “special procedure” for the calculation is connected “taking into account the state of the economy and high rates of inflation growth”, caused by various reasons, and in general – if, they say, we count based on the median incomes of Russians for 2021, which, according to Rosstat , amounted to 30,083 rubles a year, then the cost of living from January 1 should have been equal to 13,296 rubles a month, that is, it would have been less than now. But since the law prohibits reducing the PM, it would remain the same: 13,919 rubles per month.

In general, it is proposed to set the PM “based on the predicted poverty line based on the results of 2023 (14,375 rubles) and 2024 (15,049 rubles).” That is, from January 1, 2023, the cost of living in the country will increase on average by 456 rubles per month and will grow by 3.3% compared to the current one.

But what is this “poverty line” on which the minimum now depends? This indicator, which only affects the beauty of poverty reports in the country, was also introduced in 2021. The government then decided: the poor differ from the non-poor in that the former have a monthly income lower than the cost of the very outdated consumer basket in the fourth quarter of 2020, adjusted for accumulated inflation. And inflation in 2023, according to the forecast of the Ministry of Economic Development included in the draft budget, will be 5.5%. In 2024 – 4% in general … According to the results of this year, according to the preliminary calculations of the department, it will not reach 13%.

Until recently, the “border” was illogically obtained below the subsistence minimum, which, according to the law, is “the minimum amount of a citizen’s income necessary to ensure life”, that is, such an amount that it is simply impossible to live with less. Now the subsistence minimum will again coincide with the “poverty line”.