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Sunday, February 18, 2018

For higher wages the economy needs a new growth point

“Unique phenomenon” of poverty in Russia stated Deputy Prime Minister Olga Golodets – the poor are even those who work. In other words, the government finally found that the minimum wage did not offer any decent life. Economists explain the reasons for going – apparently, the current crisis has nothing to do with it.

Russia has experienced a unique social situation – poverty of the working population. This drew the attention of Deputy Prime Minister Olga Golodets during the Russian business Week.

“The minimum level of payment works in our economy has 4 million 900 thousand. Colleagues, what kind of productivity you can tell if a person for the month gets the money?” – surprised Deputy Prime Minister.

The value of the minimum wage in Russia now stands at just 7.5 thousand rubles, however, from July 1 it will rise to 7.8 thousand to Almost 5 million people officially receive a salary less than the subsistence level, which is for the working population 10 524 rubles.

However, the poverty of the working population is not a unique phenomenon. “At one stage or another of development is typical for many other countries,” says RNS’s former Minister of economy, scientific Director of HSE Yevgeny Yasin. The situation is similar in many countries of Asia and Latin America, although social protection in Russia is on a higher level, but not up to the level of the US and the EU, says Roman Tkachuk from Alpari.

Many experts link this phenomenon that real wages are often paid in an envelope. “In my opinion, you can weed out about 30-35% of “working poor”, receiving the gray salary, but 65-70% is not going anywhere,” says Kirill Yakovenko from GK “ALOR”.

Tkachuk also believes that the layer of those who receive a big salary in his hands, a small. “A much larger number of these poor people live in small provincial cities, where they are forced to exist on a salary of little more than the minimum wage. The official statistics may even understate the number of people with income below the subsistence minimum in half to two times,” he says.

“7500 rubles can meet the needs of pensioners or students as an additional increase to the pension/stipend. For able-bodied citizen such wages may be acceptable only if provided free housing, free food, or have the opportunity of earning. In all other cases, the wage for the worker is fraught with the need to make ends meet,” adds the analyst of “Alpari”.

Officially, the salary is 7.5 thousand workers of small and average business, however, they tend to have grey salaries. But really such a low paid mostly state employees low-level, operating on a single bet. Employees of municipalities, housing, kindergarten teachers, workers in culture, doctors, teachers, janitors, librarians, postmen, nurses etc.

In Russia, the phenomenon of working poor has more ancient roots than the current crisis, says Yasin. “Phenomenon due to the uneven development of regions, many of which live almost exclusively on subsidies from Moscow. While the country enjoyed high income from oil exports for development of the regional economy nothing was done – were simply transfers from the centre. Now extra money in the Federal budget, and regions must increasingly rely on their strength,” says Yasin. According to him, now seven regions feeding the rest of the country. That’s when the regions get more autonomy and be able to earn more, then wages will rise.

“The size of the salary depends on the region, as in the rich regions through grants civil servants get more, and in poor situation are often unenviable” – I agree Tkachuk. So, according to the survey of the Public television of Russia, in some regions the average salary of Tutors of kindergartens is less than 10 thousand rubles a month, far below the official figures, and wages of workers of culture and less.

Unique recipe of how to fix the situation, so the man was not poor, since he works there. Earlier in the Ministry of labor promised to raise the minimum wage and to raise it to a subsistence level, but to do it quickly fail. “In the coming years, the Ministry of labor will not be easy to rectify the situation. Russian budget remains in deficit, and the government took the policy to reduce budget expenditures. Therefore, a strong increase in the size of the minimum wage or living wage unlikely, says Roman Tkachuk. On the contrary, the government is considering options to increase taxes.” The struggle with the shadow sector of the economy has also not borne significant successes, he adds. But there is a solution – it is necessary that the Russian economy has found new points of growth, while the incomes of Russians will grow, said Tkachev.

A business can raise wages, if we distribute the margin in favor of their employees, says Zvenigorod. One law poverty not to win, but economic growth can provide the impetus for change, he agrees. The development of small and medium business is also a way of overcoming poverty, as it not only motivates people to work, creates new jobs.


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