The State Duma thought about adjusting the minimum wage for the inflation rate: who will win

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The State Duma plans to further increase the minimum wage. According to Anatoly Aksakov, head of the financial market committee, for an objective assessment of the minimum wage, it is worth using the inflation coefficient, that is, taking into account the increase in consumer prices that the country’s residents face in stores. True, the formula for estimating the next state increase has not yet been developed. According to experts, such a proposal will contribute to the well-being of citizens, if only the real costs of the poorest segments of the population are taken into account when calculating the minimum wage.

Accounting for the inflation rate when determining the minimum wage will make the indexation of the lower threshold of wages in Russia more fair, Aksakov believes. “We directively approve this indicator, but there should be a specific formula. It will be objective, ”said the head of the State Duma committee.

Apparently, the idea voiced by Aksakov still exists only in theory, and the principle of implementing this initiative has yet to be developed. Meanwhile, the issue of raising the minimum wage is relevant for at least 4.8 million living Russian citizens. According to official data, for one “minimum wage”. From January 1, 2024, the minimum wage, at the suggestion of Vladimir Putin, should increase by 18.5% – from 16.24 thousand to 19.24 thousand rubles. By 2030, this indicator should double. Due to the rapid increase in the minimum wage, according to the Ministry of Labor, the purchasing power of citizens will improve, which will positively affect the development of the economy as a whole.

As Sergey Smirnov, a leading researcher at INION RAS, explains, the minimum wage is a rather arbitrary concept and primarily concerns public sector employees, whose increase in payments to a fairly high degree depends on the income of regional and municipal budgets. The state is not going to abandon its social obligations, which is confirmed by a serious increase in the minimum wage scheduled for next year. When indexing the minimum wage, relevant officials are already largely guided by inflation data, including statistics on the rise in prices for the most necessary goods in their final figures. “Meanwhile, it is extremely difficult to find a single coefficient for determining the contribution of the growth in the annual expenses of all Russians. Each person has his own consumer basket: some need certain drugs, the cost of which can add tens of percent every month; others need to pay for a mortgage; the third have to constantly increase contributions for the education of children, and so on. Based on the current situation, the calculation of a constant and fair index, most likely, will determine only the average temperature in the hospital, while providing specific groups of Russians with rather superficial personal assistance. Any invented mechanism for additional indexation – reflecting inflation in an increase in the minimum wage – will look like an abstract and simplified approach to the issue of improving the quality of life of the population, ”the expert believes.

Technologically, it is quite possible to create a methodology for calculating the minimum wage, taking into account the standard inflationary component, Igor Nikolaev objects. However, the low-income category of the Russian population is mainly interested in raising the minimum wage. For the poorest, the concept of inflation determines the rise in price of the most affordable set of products for basic subsistence and the increase in housing and communal services tariffs. Millions of people in our country simply do not pay attention to the increase in the prices of non-food items, because they understand that even annual indexation is unlikely to allow them to allocate the necessary funds from the family budget to buy a new refrigerator or TV. Strengthening the well-being of citizens who are below the poverty line, or those who have been balancing on this very line for many years, will depend on compensating for the real rise in the cost of the most demanded goods, that is, food products, which experience more severe seasonal price increases every year.

In any case, an increase in the minimum wage, taking into account inflationary calculations, will still not have a positive effect on all Russians. “The public sector, of course, will be financially stimulated: the size of all social payments, other material subsidies and benefits calculated on the basis of the minimum wage, will increase,” Smirnov states. “But no one guarantees similar progress for workers in the private sector of the domestic economy,” according to the expert, those companies that have adapted to work in modern conditions and receive a stable profit for their goods will be able to raise salaries, taking into account the increase in the minimum wage. But it will be easier for businessmen who have reduced production output and lost their sales market to transfer employees to a shorter working day, reducing salaries to the lowest possible legal level.

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