The reality of the proposal to increase the minimum wage to 30,000 rubles was weighed

A draft law has been submitted to the State Duma, which proposes to almost double the minimum wage in Russia from January 1, 2023, to 30,000 rubles a month. The chances of its adoption are close to zero, but the problem raised by the authors is relevant: the usual mechanism for calculating the minimum wage does not work, and the current level of the minimum wage, according to trade unions, even after an increase of 10% falls short of the cost of the minimum consumer basket.

From 2021, the usual rules prescribe to determine the minimum wage (you can’t pay less for a full load) in the amount of 42% of the median salary (such that half of Russians receive less and more) for the year before last. These rules do not adjust for inflation. The minimum wage calculated in accordance with them for 2022 was to grow by 6.4% and amount to 13,617 rubles per month. But inflation made its own adjustments, last fall the usual rules seemed to be forgotten, and the minimum wage was raised by 8.6% from the New Year, to 13,890 rubles a month. After the start of a special military operation, prices initially shot up sharply, and from June 1, the minimum wage, by a strong-willed decision of the authorities and again without reference to the median salary, was increased by another 10%, to 15,279 rubles per month.

42% of the median salary is too small a share, in European countries where a similar approach to determining the minimum wage is used, it is not lower than 50%, according to an explanatory note to the draft law submitted to the State Duma by a group of deputies and senators from the Liberal Democratic Party. In their opinion, in the context of “sanctions pressure on our country, which negatively affects the growth of the economy, GDP and incomes of citizens”, the income policy needs to be reviewed, the usual rules should no longer be applied, and from January 1, 2023, a minimum wage of 30,000 rubles per month.

The price of the issue, as follows from the financial and economic justification, is almost 1.2 trillion rubles per year. Half will have to be paid to private businesses, the rest to the federal and regional budgets. The source of funds could be additional federal budget revenues, which, according to the Ministry of Finance, will amount to 1.5 trillion rubles in 2022, the document recalls. The transition to a progressive taxation scale, and other measures would also help …

There is no government decision on this initiative yet. But do the deputies really believe that the Ministry of Finance will find funds, and business will incur additional expenses of this order? One of the authors, head of the Duma Committee on Labor and Social Policy Yaroslav Nilov (LDPR), answered this question of MK as follows: 42% of median salary for 2021.” According to the deputy, the median methodology is acceptable in a situation where real wages are growing, when inflation is low and the economy is stable. We don’t have any of this, talk about temporary deflation should not be reassuring, and in the current circumstances it is necessary to manually adjust the minimum wage.

All proposals concerning the regulation of labor relations are preliminary discussed within the framework of the Russian tripartite commission with the participation of representatives of the government, trade unions and employers. The LDPR initiative has not yet been considered there, but at the last meeting of the commission on July 22, the issue was raised by the head of the FNPR, Mikhail Shmakov. “If until 2021 the minimum wage in Russia was calculated on the basis of expenses, depended on the consumer basket, now it is calculated on the basis of income, tied to the median salary, which is wrong in such a force majeure situation as it is now, because incomes will obviously grow slower than expenses, and the minimum wage will also grow more slowly than when calculated according to the old method, ”his deputy Alexander Shershukov explained to MK the position of the trade union side. It follows from the calculations of the FNPR that already in the first quarter the subsistence minimum for the able-bodied population, calculated according to the consumer basket, based on the cost of the minimum set of food, services and non-food items necessary for life, was 15,521 rubles per month, while the minimum wage even after June increase rose only to 15,279 rubles a month. And the minimum required per capita spending in the whole of the Russian Federation, taking into account rational consumption standards established by order of the Ministry of Health in 2016, in the first quarter of 2022 generally reached 19,388 rubles per month. Deputy Prime Minister Tatyana Golikova, according to Mr. Shershukov, in response, suggested waiting for forecasts of socio-economic development for next year and the draft budget (it should be submitted to the State Duma before October 1). “The question is not in a specific figure, but in the fact that there is a working methodology that would allow for an increase in the minimum wage,” the deputy head of the FNPR believes. “And this problem will have to be dealt with at the level of a tripartite commission, in the process of relations with United Russia (it has a majority of votes in the State Duma. – MK) and the Ministry of Finance.”

“In the current economic situation, the proposal, despite all its attractiveness, looks like pure populism. Firstly, a doubling of the minimum wage will require budgets at all levels to increase wage funds by at least 1.5 times in order to maintain differentiation in salaries between positions, and this will cost a lot. And commercial organizations, in the face of declining consumer demand, simply have nowhere to get funds for such an increase, ”economist Alexander Safonov (Financial University under the Government of the Russian Federation) assessed the LDPR initiative in a conversation with MK. He agrees that the current methodology for calculating the minimum wage based on the median salary is not relevant, now the minimum wage should be indexed taking into account the growth rate of consumer prices, but the minimum wage must be raised carefully, for example, by the end of the year to the level of 17 thousand rubles. At the same time, it is necessary to ensure that this measure does not increase unemployment and does not give rise to part-time employment, the transfer of workers to part-time jobs, the expert warns.

Published in the newspaper “Moskovsky Komsomolets” No. 28845 dated August 12, 2022

Newspaper headline:
Unbearable minimum wage