The Ministry of Labor proposed to change the ratio of the minimum wage and the median salary

The Ministry of Labor proposed from January 1, 2025 to bring the minimum wage (minimum wage) closer to the median salary. The department wants to increase the approved ratio of indicators from 42% to 48%. The relevant bill has been published on the regulation.gov.ru portal. The document also consolidates the previously announced indexation of the minimum wage by 18.5% from the beginning of next year.

The median salary actually means the average salary in the country. The indicator means that half of the jobs are paid below this value, and the other half are paid above. In 2022, it was equal to 40,368 rubles, Rosstat previously reported. Since 2021, the minimum wage has been set at 42% of the median salary, but due to rising prices, it was decided not to use this method until the beginning of 2025.

“On behalf of the President, consistent work is underway to increase the minimum wage. From January 1, 2024, the minimum wage will be increased by 18.5% and will amount to 19,242 rubles,” said the head of the department, Anton Kotyakov (his words are reported by the press service). From 2025, the calculation of the minimum wage should return to a methodology that implies dependence on the median wage, he added. In order to maintain outpacing growth rates, the ministry proposes to change that ratio of indicators from 2025 “and determine it at a level of at least 48%.”

To increase the minimum wage, 75.9 billion rubles will be allocated from the budgets of all levels, and 47.4 billion rubles from the extrabudgetary sector, the Ministry of Labor specified. According to the department, the changes will ensure wage growth for 4.8 million workers. In addition, the minimum wage serves as the minimum basis for calculating sick leave payments.

As of January 1, 2023, the minimum wage was set at the level of 16,242 rubles, from January 1, 2024, the minimum wage will be 19,242 rubles.

The minimum wage is one of the important tools in supporting the well-being of the population, and its increase, together with social support measures, will help reduce poverty in the country, Deputy Prime Minister Tatyana Golikova said during an expanded meeting of the collegium of the Ministry of Labor and Social Protection on May 19. Earlier, Rosstat reported that the number of citizens with incomes below the poverty line in 2022 amounted to 15.3 million people (10.5% of the total population) – this is the minimum for the entire period of observation (conducted since 1992).

The situation with poverty in different regions is different, the Deputy Prime Minister stressed, the figure varies from 4.5% in St. Petersburg to 30.5% in Ingushetia. The federal poverty line in 2022 was 13,545 rubles, but the regions also have separate levels. Golikova added that by the end of 2022, Khakassia, Ingushetia, Adygea, Karachay-Cherkessia, Kalmykia, North Ossetia, Komi, the Orenburg region and the Nenets Autonomous Okrug did not achieve poverty reduction indicators. And in Ingushetia, Khakassia, Adygea and Tuva, its growth was recorded.

The minimum wage affects wages in the public sector more, but it is a kind of trigger that pulls up the overall level of wages in the country, director of the Institute for Economic Forecasting of the Russian Academy of Sciences Alexander Shirov noted earlier. In the current conditions, there is some competition between the public sector and the commercial sector – an increase in wages in one leads to an increase in the other, the economist explained.