What is the minimum wage in Russia?

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:41

Salary, more precisely, its size and terms of payment, are the main characteristics of the future workplace that concern almost every job seeker. Therefore, it is not surprising that one of the main issues constantly discussed in the press and raised on the eve of the next election by potential candidates for positions is the minimum wage. So what is the fair minimum wage?

Minimum wage and living wage

One of the most interesting and controversial economic issues in the post-Soviet space is the concept of a living wage and its relationship with the minimum wage. So, how is the cost of living calculated, and what should the minimum wage be? Under the living wage, as a rule, they mean the minimumthe allowable amount of income that can provide a single person (not in any way as part of a household of several entities!) to support his life. Simply put, this is the cost estimate of a certain conditional consumer basket.

In our country, it includes potatoes, bread, pasta, cereals, fruits, meat, eggs, etc. In addition to food, the basket includes non-food items in an amount equal to half the cost of food. The cost of paying for various services, including a communal apartment, is also half the cost of a conditional food basket. The subsistence minimum is calculated on the basis of statistical data, that is, it has a certain basis. Therefore, it seems that the answer to the question of what minimum wage should be paid to employees is obvious - not below the subsistence level.

Russia: Minimum wage and fines

In Russia, the main document that determines what minimum wage should be assigned to employees is the relevant law regulating the minimum wage. Initially, they were guided not only in determining the positions of interaction between employees and employers, but also in calculating a number of pen alties and determining the size of the authorized capital for commercial companies. However, with a fairly rapid increase in the minimum wage, striving for the average wage in the country as a whole, in addition to reducing the difference in the welfare level of workers receiving the minimum wage and workers whose earnings are comparable to the average wage in the industry, therea paradox when a possible sharp increase in administrative fines (which can be imposed on anyone, for example, for violating traffic rules) could lead to a certain social tension.

Therefore, since 2009, to determine the amount of administrative fines, they have been guided by the “base amount” category, which significantly differs downward from what the minimum wage in Russia is paid on the date of the violation.

Minimum wage in Russia

The subsistence minimum is calculated separately by regions and is subject to periodic adjustment, taking into account price increases and inflation. The minimum wage is adjusted, unfortunately, not so often, since for its guaranteed payment a certain economic base is needed both at enterprises and in the public sector. At the same time, it is the subsistence minimum that is taken into account when determining the size of the social pension. That is, a certain paradox has developed in Russia: the minimum wage, which is currently being paid, does not keep pace with the cost of living. A rather specific category of the poor has emerged – the working population. Naturally, this phenomenon was considered at all levels of government with simultaneous attempts to develop a strategy to determine what minimum wage in Russia would make it possible to solve the problem of poverty of the working population.

Minimum wage by region

Only the lower limit of the minimum wage is legally fixed. Regionsgiven the right, in the presence of their own financial and economic resources, to independently determine what minimum wage will be paid within their borders. The “poorest”, subsidized, naturally, are forced to focus on the federal standard. However, donor regions act in their own way in the existing legal framework: if you turn to official sources of regions and territories for information on what the minimum wage is currently paid in their territory, the spread will be quite significant. For example, the minimum wage in Moscow since January 1, 2016 is 18,742 rubles, while the legally established 6,204 rubles. Relevant agreements were signed with business representatives by the authorities.

What is the minimum wage from January 1, 2018 will be paid in Russia

One of the main tasks facing the Government of the Russian Federation today is to bring the minimum wage to the subsistence level. A certain schedule has been drawn up, which is reflected in the legislation, in accordance with which the dates for the next increase are determined. A rather serious increase is planned for 2018 - by 22%, which will provide three-quarters of the subsistence minimum. The minimum wage, which all employers will be guaranteed to pay from January, will be 9,489 rubles. By region, it may slightly differ upwards due to the presence of regional coefficients. Corresponding pivot tables have already appeared on most accounting resources and in mailing lists for subscribers.

Prospects for furtherminimum wage changes

A gradual increase, in addition to this January, was planned to increase the minimum wage only from January 2019. However, based on the stabilization of positive phenomena in the economy, recorded by the Ministry of Economic Development, the current President of the Russian Federation V. V. Putin has already declared a possible increase in the minimum wage from May 2018. The relevant law has not yet been adopted.

Minimum wage and taxes

An important point is that, in addition to stimulating the purchasing power of the population through the growth of its income, an increase in the minimum wage, as a rule, contributes to the “withdrawal from the shadow” of a part of the taxable base. It's no secret that after a significant increase in the tax burden on businesses since 2013, due to an increase in contributions to the pension system, some representatives of the business community, in order to optimize their tax burden (and sometimes just to survive), were forced to withdraw some businesses in the shade. First of all, it was, of course, the wage fund. Part of the income of employees from the official version simply migrated into envelopes. Accordingly, revenues to the budgets from income tax, contributions to compulsory medical and social insurance have decreased. Probably, the pension system did not receive the income expected from the increased norms of deductions.

Conclusion

The minimum wage in the amount officially approved in Russia is, according to economists, one of the lowest in the world. The reason for this situationperhaps the accepted approach to its calculation is also - from the subsistence minimum. According to generally accepted world practice, it is calculated as a percentage of the average salary in the country.

The government cites the low level of labor productivity in Russia as a whole as a counterargument.

Perhaps, it is worth reconsidering approaches and switching to hourly rather than monthly wages, tying it just to the average salary in the country.