The Ministry of Labor proposes to raise the ratio of the minimum wage to the median salary

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The Ministry of Labor proposes to raise the ratio of the minimum wage (minimum wage) to the median wage in Russia – from 2025 it should be at least 48% instead of the previously established (but “paused”) 42%. In fact, the new value fixes the ratio of the minimum wage, increased from 2024 to 19.2 thousand rubles, with the level of the median salary already achieved at the end of 2022. This means that, given the further growth of the median wage, the minimum wage will soon have to be increased even further.

The Ministry of Labor has developed a draft amendment to the law “On the minimum wage”, which proposes to increase the minimum wage by 18.5% from 2024. The relevant bill has been published on the regulation.gov.ru portal. With the same document, the agency intends to fix a new ratio of the minimum wage and the median salary indicator (the value that half of the workers in the country receive more and less), increasing it from 42% to a level of at least 48% from 2025.

To clarify, in 2020, the Ministry of Labor proposed to move from a relatively arbitrary to a planned increase in the minimum wage. To do this, the department has developed new ways to determine the minimum wage and the minimum – if earlier these were absolute values, then they began to be calculated as shares of the median income (44.2%) and median wages (42%) of the population. Although the transition to the new methodology did not lead to a rapid increase in indicators, its implementation was in line with the practice of European countries (there, however, these shares were initially at the level of 50-60%) and made it possible to streamline the schedule for increasing these indicators.

According to the plan of the Ministry of Labor, the established shares were to be reviewed at least once every five years. However, already in 2021, due to the pandemic and the price hike, the government suspended the new methodology and returned to raising the minimum wage manually. However, over this period, the minimum wage increased significantly – from 12.8 thousand to 16.2 thousand rubles, that is, by almost 30%. This corresponded to the growth rate of the median salary, which increased from 32.2 thousand rubles. in 2020 to 40.3 thousand rubles. in 2022. As a result, the minimum wage widened the gap with the subsistence minimum, which has grown during this time from 11.6 thousand to 14.3 thousand rubles.

Earlier, Vladimir Putin promised that from 2024 the minimum wage would be increased by another 18.5%, to 19.2 thousand rubles. As the Ministry of Labor, which formalized this promise into a draft law, explained yesterday, 75.9 billion rubles will be spent on raising the federal and regional budgets, while employers’ expenses will amount to another 47.4 billion rubles. According to the department, this will increase the salary of 4.8 million Russians. Earlier, Deputy Prime Minister Tatyana Golikova stated that at least 6 million labor contracts were concluded in the Russian Federation with payment in the form of a minimum wage and below.

It should be noted that the minimum wage proposed from 2024 at 19.2 thousand rubles. is already 48% of the 2022 median salary. Taking into account the fact that it is likely to continue to grow (which is very likely in the context of the current shortage of personnel), then in 2024 we can expect a new increase in the minimum wage. This, in turn, should contribute to a further reduction in the level of poverty (at the end of 2022, Rosstat recorded its lowest value since 1992), as well as income inequality, which, at the end of last year, also decreased to a minimum over the past 20 years (see “Kommersant” ” dated March 1).

Anastasia Manuylova

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