Raising the minimum wage to the subsistence level will help Russia move to an innovative economy and increase the overall level of wages, experts say. But in what time frame it will be possible to equalize these indicators, neither experts nor officials know

Head of Government Dmitry Medvedev On May 2, the heads of the ministries of labor, finance and economic development will prepare a draft federal law on increasing the minimum wage (minimum wage) to the subsistence level and submit it to the government. Medvedev already spoke about plans to increase the minimum wage in his April report on the work of the government in the State Duma. Then the head of government recalled that from July 1 this figure will rise to 7,800 rubles, but this is still 27% below the current subsistence level. The Prime Minister called raising the minimum wage to the level of the subsistence level as a task for the next few years.

What has prevented you from doing this in the last 15 years?

The minimum wage is established simultaneously throughout the country and cannot be lower than the subsistence level of the working population. This norm has been in effect since February 1, 2002, but the Russian authorities have not been able to equalize these two values ​​for 15 years.

A paradoxical situation arises when people can earn less than is necessary for subsistence - to buy food and clothing, points out Alexander Shcherbakov, professor of the Department of Labor and Social Policy at the Institute of Public Service and Management of the Russian Presidential Academy of National Economy and Public Administration. In essence, he explains, the prime minister’s order is simply a belated implementation of the law.

The reason for the 15-year gap between the minimum wage and the subsistence level lies in the confrontation between the social and financial-economic blocs, says Yaroslav Nilov (LDPR), Chairman of the State Duma Committee on Labor, Social Policy and Veterans Affairs. “The financial bloc is always interested in saving and cutting funds.<…>Indeed, for 15 years the law has been violated, which is bad not only from a legal point of view, but also from a moral point of view. However, everything is decided by political will. As we saw with the example of a lump sum payment to pensioners, with the strong will of the president, the money is immediately available,” he told RBC. At the same time, it is unclear where the government will propose to get funds to equalize the minimum wage and the subsistence level, Nilov notes. “If this money is taken from cuts in other social obligations, then even more people may suffer than now. If other reserves are found, that’s good, but we need to see how it all ends. In this situation, additional sources of funding are needed,” the deputy admits.

Common denominator: the minimum wage will be equal to the subsistence level

(Video: RBC)

When might this happen?

The time frame within which it is necessary to bring the minimum wage and subsistence level to a single indicator is also unclear. The prime minister’s order specifies only the deadline for preparing the project - May 20, but Deputy Prime Minister Olga Golodets admitted on May 2 that there is no single position on this issue. “There are representatives of workers and there are representatives of employers who participate in this discussion, their positions do not coincide. We have a short period of time to bring their positions to a common denominator,” she said.

The three departments responsible for carrying out the prime minister’s instructions were unable to answer the question about the timing of the start of the law. The Ministry of Economic Development forwarded all questions related to the development of the bill to the Ministry of Labor. The Ministry of Labor told RBC that they are not yet ready to voice their position. The Ministry of Finance did not respond to RBC's request.

The head of the Ministry of Labor, Maxim Topilin, previously said that his department proposed to agree at the federal level with all partners on a clear line of equalizing the minimum wage and the subsistence level. “Suppose, from July 1, 2018, the ratio should be 80%, from July 1, 2019 - 90%, from July 1, 2020 - 100%,” he said. According to Topilin, this topic was discussed with the Ministry of Economic Development and the Ministry of Finance; there are no fundamental disagreements with federal departments. “Unless the Ministry of Finance can say: let’s move the equalization schedule a little. And employers may ask for equalization, for example, not by 2021, but by 2022,” Topilin said. Now, according to the Ministry of Labor, the minimum wage is 70% of the subsistence level.

Maxim Topilin (Photo: Vladislav Shatilo / RBC)

Who benefits from equalizing the minimum wage and the cost of living?

By raising the minimum wage to the subsistence level, the budget, the economy, and workers will benefit, says Alexander Safonov, vice-rector of the Academy of Labor and Social Relations. If you follow economic logic, he explains, then a person with a salary below the subsistence level cannot be financially independent: he will not have enough money for food or clothing. Therefore, the state allocates subsidies for such workers, and this is additional budget expenses. “Increasing the minimum wage means increasing the level of economic independence of citizens. The second is to reduce government spending on social programs by reducing the number of people who previously could qualify for this assistance, receiving a salary below the subsistence level. The third point is the legalization of company expenses on wages. Fourth, increasing the income of extra-budgetary funds, because their income depends not only on tariffs [insurance contributions], but also on the size of the wage fund,” lists Safonov. If these relations are legalized, the budget revenue base in terms of personal income tax will also increase.

Everyone will benefit from raising the minimum wage, agrees Shcherbakov from RANEPA: in a favorable course of events, this will mean a nominal, albeit small, increase in wages in general, because the level of the average wage and many benefits indirectly depend on the level of the minimum wage.

Russia has a low level of labor productivity, which is compensated by low wages. But stimulating the economy by supporting inefficient jobs is a macroeconomic risk, Safonov points out, and the Russian labor market has already experienced a sharp increase in the minimum wage without any problems. “There was a story in 2005: then the minimum wage was raised more than three times in three years - from 800 to 2,500 rubles. During this time, unemployment did not increase, but, on the contrary, decreased,” says Safonov.

Why else is the minimum wage important for citizens?

Salaries in Russia should not be lower than the minimum wage, currently it is 7,500 rubles. per month, from July 1 - 7800 rub. This amount may include salary, bonuses and compensation. From this amount, the employer withholds personal income tax (NDFL) at a rate of 13%, so that in fact the employee may be paid a smaller amount. An employee can receive less than the minimum wage if he works part-time or part-time.

Also, the minimum wage in some cases is used to calculate the amount of benefits for temporary disability and pregnancy, for example, for those workers whose work experience does not exceed six months or whose average earnings for the previous two years are below the minimum wage.

An increase in the minimum wage may lead to an increase in the burden on individual entrepreneurs. Now the individual entrepreneur’s contribution to pension and health insurance depends on the size of the minimum wage: it is directly proportional to the size of the minimum wage. The Ministry of Economic Development in April from linking individual entrepreneurs’ contributions to the minimum wage and calculating them based on a fixed amount, annually indexed for inflation. According to the department, eliminating the minimum wage from the formula for calculating contributions will make the burden on them more predictable and will avoid its sharp jumps.

An actual increase in the minimum wage may not occur, it will be nominal, admits Vasily Koltashov, head of the Center for Economic Research at the Institute of Globalization and Social Movements. “This measure has been necessary for a long time, it is correct. But will this lead to a real increase in wages in Russia? The minimum wage may be increased, but most people will be transferred to half the rate. This is a famous trick. Accordingly, people’s salaries will remain the same,” the expert believes (quote from Prime).

Increasing the minimum wage and bringing it to the subsistence level will contribute to the transition to a high-tech economy and increased wages, Safonov believes. “Cheap labor is our scourge, as is oil dependence. In Russia, we are traditionally hostages of the situation; we compensate for the low efficiency of our workforce with low wages,” he believes. It is impossible to move to an innovative economy using cheap labor and unskilled personnel, the expert is sure. And an increase in wages will increase labor costs, the employer will strive to increase its productivity, and therefore look for more highly paid and qualified workers.

What loopholes are there for lowering the cost of living?

The Russian method of calculating the cost of living differs from the world, says Safonov: in European countries, those families that spend more than 50% of their total expenses on food are considered poor. “Our living wage is calculated using a normative-statistical method, that is, a matrix of calorie consumption by a person of different gender and age is built, then it is broken down into fats, proteins and carbohydrates, into microelements that a person must receive to survive. Then groups of products are looked for that meet this task - to gain the necessary calories and the required amount of microelements,” he explains.

Photo: Sergey Nikolaev / Interpress / TASS

The methodology for calculating the cost of living was developed back in the USSR, explains Safonov. Then they relied not only on the capabilities of the budget, but also on the economy—whether the country could produce as many goods as it needed to consume. “We understood that there should be more meat for a healthy diet. But the economy did not provide such a quantity of meat, so to the maximum extent there was bread, potatoes, cereals - everything that was cheap compared to other goods,” says the expert.

The composition of the food basket can be made cheaper by including another group of goods, cheaper, he explains: for example, if you reduce the annual consumption of meat and increase cabbage, the cost of living will decrease. This, for example, can be explained in the fourth quarter of 2016: by April government order it was set at 10,466 rubles. for the working-age population - 2% less than in the previous quarter.

Should the cost of living be the same everywhere?

The living wage in Russia is quite modest, says Nikolai Kalmykov, director of the RANEPA expert and analytical center, and it is necessary to increase the minimum wage not only gradually, but also taking into account regional specifics. “The cost of living is different everywhere, ​and very different, and the question here is rather how to do it correctly so that there are no unnecessary budget expenses, on the one hand, and on the other hand, so that this measure does not put pressure on business. Business must be able to adapt to changes,” reflects Kalmykov.

The head of the Ministry of Labor, Maxim Topilin, previously told RBC that his department had prepared proposals for regionalizing the minimum wage. “It is irrational to establish a minimum wage equal to the federal subsistence minimum, because the subsistence minimum in each region is different. In Ingushetia or the Bryansk region it is 8-9 thousand rubles. per month, and in Chukotka - 18 thousand,” Topilin explained the department’s position. According to the Ministry of Labor, a minimum wage at the level of the subsistence level on average in the country will lead to the fact that in a number of regions the cost of labor will be overestimated. “We must make the minimum wage de facto regional; it must be equal to the subsistence level in each specific region,” Topilin said.

The government abandoned the idea of ​​regionalizing the minimum wage, Deputy Prime Minister Olga Golodets said on May 2. The bill that will be developed in the Cabinet of Ministers will deal with the federal minimum wage and the federal subsistence level. “We are only talking about the minimum wage in terms of today’s legislation. that is, this is a single federal cost of living,” said Golodets (quoted by

"TASS/kremlin.ru"

TVER, January 10. /TASS/. The minimum wage (minimum wage) will be brought to the subsistence level earlier than planned - from May 1, 2018. This was stated by Russian President Vladimir Putin during a conversation with workers of the Tver Carriage Plant.

The head of state recalled that in July last year the minimum wage was raised to 70% of the subsistence level, it was increased again on January 1, 2018, and it was planned to level these figures in another year. According to the president, the question of accelerating this process was raised at a recent meeting with him by the head of the Federation of Independent Trade Unions of Russia, Mikhail Shmakov. “I told him that we will see how possible this is based on how the Russian economy will work,” Putin noted.

“Our positive dynamics of the Russian economy continues - we have a smaller budget deficit than we expected, our gold and foreign exchange reserves are growing. That is, the Russian economy is on the rise, and this trend continues. We have the opportunity to equalize the Minimum wage and living wage, we will do this,” Putin emphasized. He noted that the increase in the minimum wage will affect approximately 4 million people, including civil servants, employees of small enterprises, some working pensioners, etc.

The head of state emphasized that the minimum wage will be constantly indexed and will no longer fall below the subsistence level.

Question about money

The President recalled that today the minimum wage is “only 9,489 rubles.” “And, as long as I can remember, we have been talking all the time and continue to talk about the need to at least equalize the minimum wage with the so-called living wage,” the president said, noting that at the moment the living wage is more than 11 thousand rubles.

“The question has always boiled down to one thing - the lack of budgetary opportunities, but it is quite obvious that this is: a) unfair, b) it distorts the labor market, it must be civilized, a person must receive at least the minimum in order to be able to live on these money, and if this is not there, then this is an abnormal situation,” the head of state continued.

Putin also noted that a sharp increase in the minimum wage could have a negative impact on the self-employed, whose contributions to social funds depend on this indicator. “We deliberately, in order not to create such problems, made a cut-off and, from January 1 of this year, “teared off” payments to social funds from the minimum wage,” added the head of state.

Living wage and minimum wage

The living wage is the cost of the minimum set of food products, goods and services necessary to maintain health and ensure human life. The cost of living also takes into account the monthly payments and fees required. Today in Russia there is a living wage for an able-bodied person, for a pensioner and for a child.

The minimum wage is the minimum wage for Russians before deduction of personal income tax.

In addition, the amount of maternity benefits for those who do not have insurance (work) experience depends on the minimum wage.

Often every person comes across the concepts of “living wage” and minimum wage in the media and official documents.

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But not everyone knows what they mean. Not to mention remembering their meanings.

In fact, these are quite important indicators that may be needed to determine the amount of wages, required social benefits, establish the possibility or impossibility of receiving various benefits, etc.

Normative base

The federal cost of living is determined on the basis of Federal Law No. 134-FZ of October 24, 1997.

Each subject of the federation also has regional regulations governing the procedure for determining the cost of living in a particular region.

They usually only slightly adjust the values ​​imposed by federal law. The procedure for setting the minimum wage is regulated by Federal Law No. 82-FZ of June 19, 2000.

What it is

The subsistence level (LS) is a value that shows how much money a person needs per month to conduct life without compromising their health.

It is set based on the cost of the consumer basket.
The minimum wage is the minimum wage per month, or, more simply, the minimum wage.

The employer has the right to pay less only in exceptional cases, specifically specified in the law.

Both indicators are necessarily established at the federal level. And also, the cost of living is necessarily established quarterly at the regional level (regional, republican, etc.), taking into account the specifics of the economy and climate of a particular subject of the Russian Federation.

There is no mandatory requirement to establish a regional minimum wage, but many constituent entities of the Russian Federation still do this in order, if necessary, to at least bring it closer to the level of the regional minimum wage.

On its basis, it is determined whether a family (or one person living) belongs to the category of low-income people or not.

Often the possibility of receiving various benefits and social payments (scholarships, allowances, etc.) depends on this.

What factors are taken into account when calculating

Currently, the federal minimum wage and the minimum wage are equal. But not everyone knows how the cost of living is determined.

In fact, quite a lot of factors are taken into account. It is necessary to calculate the cost of the food basket, mandatory services and the minimum mandatory set of non-food products (hygiene products, clothing, etc.).

Quite a lot of questions are raised by the established set of products for determining the living wage.

It really allows a person to survive, but it is very difficult to call nutrition using only it healthy or normal.

Even more controversial is the amount of the subsistence minimum for non-food goods and services.

They are calculated as a percentage of the cost of the food basket. This leads to the fact that the indicators do not assess the real situation at all.

If the salary is lower

The employer must take into account that the minimum wage is equal to the subsistence level in 2019, starting in May.

If an employee’s salary is lower than the federal minimum wage, then he must make an appropriate additional payment to it.

The only exceptions are employees working part-time (part-time). At the same time, the employee may receive a lower amount.

Important! Salary is not only a salary, but also various bonuses, incentive payments, etc.

It is the total income for the month before deduction of personal income tax that should be no less than the amount established by the minimum wage.

The exception is the Leningrad region and other regions, where, according to a tripartite agreement, the salary must not be lower than a certain value.

If the employer nevertheless pays a salary below the subsistence level, then the full-time employee has the right to protect his rights and interests.

He can appeal to the labor inspectorate or court. Both options can result in negative consequences for the employer.

In any case, he will have to make the required additional payments, and in addition, he will also have to spend money on a fine.

Table. The amount of fines for employers for paying a salary to a full-time employee in an amount below the minimum wage:

Payment of wages by the employer in an amount less than the established minimum wage will also inevitably attract the attention of the tax authorities.

They will definitely start checking whether the employer is hiding the payment of funds to employees from taxes or, more simply put, they will look for salaries “in envelopes”.

Even the very fact of close attention from tax authorities can often lead to difficulties in the organization’s work.

Value by region since May 1

The minimum wage and subsistence level vary depending on the region. This is due to the fact that Russia is a large country, and each region has its own specific economic situation and climate.

These factors influence the price level in the subject of the federation, and averaging everything to the country level does not always make sense.

For example, regions, autonomous okrugs and republics with difficult climatic conditions have always had higher minimum wages and minimum wages, but prices in them are even higher for food.

Regional authorities can establish a regional minimum wage by concluding a tripartite agreement with employers' associations and trade unions.

But at the same time, it can never be lower than the level of the federal minimum wage, which is established by the relevant Government Resolution.

Important! In some regions, special allowances must be applied when determining the minimum salary of an employee. For example, this rule applies to the regions of the Far North.

Local authorities are required to establish a subsistence minimum for the region every quarter for all major socio-demographic groups of the population (working-age, pensioners, children), as well as its average per capita value.

The level of PM in the region must be approved by the Decree of the regional Government no later than 3 months after the end of the corresponding quarter.

We provide detailed information on the current values ​​of the minimum wage and minimum wage in some regions of the Russian Federation in the following table:

Region, area	Minimum wage	Living wage (per capita), rubles
Arkhangelskaya	11163 rub.	11524
Astrakhan	-«-	9335
Bryansk	-«-	9558
Vladimirskaya	-«-	9309
Vologda	-«-	10507
Voronezh	-«-	8269
Karachay-Cherkess Republic	-«-	9094
Kirovskaya	-«-	9627
Krasnodar region	-«-	10005
Krasnoyarsk region	-«-	11341
Lipetsk region	-«-	8448
Magadan	-«-	17867
Moscow	18742	15786
Moscow region	14200	11608
Murmansk	11163	14176
Omsk	-«-	8946
Orenburgskaya	-«-	8495
Penza	-«-	8754
Perm region	-«-	10098
Primorsky Krai	-«-	12200
Republic of Tatarstan	-«-	8527
Ryazan	-«-	9192
Samara	-«-	9672
Saint Petersburg	-«-	10862,1
Saratovskaya	-«-	8407
Sakhalinskaya	-«-	13391
Sverdlovskaya	-«-	10301
Smolenskaya	-«-	9884
Stavropol region	-«-	8472
Tambov Region	-«-	8339
Tverskaya	-«-	9871,11
Tomsk	-«-	10748
Tyumen	11212	10468
Khabarovsk region	11163	12975
KHMAO-Yugra	-«-	14273
Chukotka Autonomous Okrug	-«-	21469
Yamalo-Nenets Autonomous Okrug	-«-	16680
Yaroslavl region	-«-	10132

Which benefits are affected?

Each region in Russia has the right to establish its own social benefits and additional payments.

An increase or decrease in payments established at the federal level by decision of the authorities of a constituent entity of the federation is not allowed.

Most regional benefits are targeted and intended for families where the level of income per member does not reach the regional subsistence level.

Let's look at what benefits are affected by the regional cost of living:

Pensions deserve special attention. All regions pay extra, if necessary, up to the level of living wage established in them for pensioners.

The State Duma adopted in the third and final reading a government bill to increase the minimum wage (minimum wage) to the subsistence level. According to the draft law, from January 1, 2018, the minimum wage will be set at 85% of the subsistence level - that’s 9,489 rubles.

What will the minimum wage be in 2018?

From July 1, 2017, federal Minimum wage raised from 7500 to 7800 rubles. As for the cost of living per capita, it exceeds 10,329 rubles.

Minimum wage will “catch up” with this indicator gradually. From January 1, 2018, it will be set at 85% of the specified value - that is, at the level of 9,489 rubles per month. And starting from January 1, 2019, the “minimum wage” will always be equal to the subsistence level for the second quarter of the previous year.

Disputes around this issue raged for 25 years, but the President of the Russian Federation finally put an end to it. In September, Vladimir Putin, at a meeting with the head of the public organization "Support of Russia" Alexander Kalinin, promised that the authorities would increase Minimum wage, and emphasized that people cannot receive wages less than the subsistence minimum.

Deputies also introduced an insurance norm against downgrades Minimum wage. Indeed, in conditions of declining inflation, a situation may arise that the cost of living will decrease compared to last year. In this case, as the first deputy chairman of the United Russia faction Andrei Isaev emphasized, Minimum wage will not decrease, it will only grow - this safety norm is laid down in the law.
He stated from the Duma rostrum that the long-awaited increase was achieved as a result of serious work - after it became clear that the regions and municipalities and employers would cope with this task. Before this, Isaev recalled, the authorities allocated the necessary funds to support the regions. “We make this decision responsibly. We make it thanks to the consistency and political will of the president, who insisted on this decision,” the parliamentarian emphasized.

The amendments will help raise the purchasing power of the population and the price of labor in Russia, the specialized labor committee is confident, whose position was previously presented by Mikhail Tarasenko (“ER”).

The State Duma also refuted concerns about an increase in fines after the increase in the “minimum wage”. After all, the dependence between them has been removed. So the increase Minimum wage will bring only “pluses” to the population. The most obvious thing is that monthly wages in our country can be higher than this level, but not lower. Smaller payments will be a gross violation of labor laws and may lead to administrative or even criminal liability. No less important is that from Minimum wage The amount of social benefits depends.

A number of regions themselves have introduced a “link” to the subsistence minimum and, accordingly, raised the “minimum wage”. For example, in Moscow, both of these indicators amounted to 18,742 rubles since October of this year. However, the majority of federal subjects still adhere to the federal “bar”.

Implementation of the law will require funding from the federal budget. According to the Ministry of Finance, 4.4 billion rubles will be spent on these purposes in 2018. In 2019, 16.3 billion rubles will be allocated, and in 2020 - 19.2 billion rubles.

As Deputy Head of the Ministry of Labor Lyubov Yeltsova told deputies, a third of budget expenditures will return to the budget system in the form of payment of insurance contributions to state extra-budgetary funds and personal income tax. According to the department, the bill will affect 4 million people, including 1.6 million in the public sector.

Experts from RANEPA and the Gaidar Institute previously predicted that low-skilled personnel would benefit from the innovation. However, scientists do not expect that Minimum wage will work as a tool for increasing labor productivity.

How the minimum wage has changed

Minimum wage 2017 from July 1, 2017	RUB 7,800	Art. 1 Federal Law dated December 19, 2016 N 460-FZ
Minimum wage 2016 from July 1, 2016	7,500 rub.	Art. 1 Federal Law dated June 2, 2016 N 164-FZ
Minimum wage 2015 from January 1, 2016	RUB 6,204	Art. 1 Federal Law dated December 14, 2015 N 376-FZ
Minimum wage 2014 from January 1, 2015	RUR 5,965	Art. 1 Federal Law dated December 1, 2014 N 408-FZ
Minimum wage 2013 from January 1, 2014	RUB 5,554	Art. 1 Federal Law dated 02.12.2013 N 336-FZ
Minimum wage 2012 from January 1, 2013		Art. 1 Federal Law dated 03.12.2012 N 232-FZ
Minimum wage 2011 from June 1, 2011		Art. 1 Federal Law dated 06/01/2011 N 106-FZ
Minimum wage 2010 from January 1, 2009		Art. 1 Federal Law dated June 24, 2008 N 91-FZ
Minimum wage 2007 from September 1, 2007		Art. 1 Federal Law dated April 20, 2007 N 54-FZ
Minimum wage 2006 since May 1, 2006		Art. 1 Federal Law dated December 29, 2004 N 198-FZ
Minimum wage 2005 from September 1, 2005		Art. 1 Federal Law dated December 29, 2004 N 198-FZ

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The minimum wage – otherwise the minimum wage or “minimum wage” and the living wage – are important social indicators that are interconnected. The entire economy of the country relies on them, and federal and regional budgets are planned. However, these concepts are different in their purpose. Minimum wage and living wage: what is the difference between them? More about this in our review.

"Minimum wage"

The minimum wage is the lowest wage limit for an employee, including those without qualifications. It is determined by the legislation of the Russian Federation. The employer does not have the right to set wages less than this amount if the employee has worked a full month (full time).

The amount of the minimum wage can be added up to:

• from the salary of the position;
• additional payments;
• bonuses;
• compensation.

"Minimum wage" in action

The minimum wage applies:

• determining the minimum amount of benefits for temporary disability, pregnancy and childbirth;
• regulation of wages.

Please note that as of January 1, 2018, minimum wages are no longer used to determine the amount of fines and other mandatory sanctions.

Types of minimum wages

Based on practice, the following types of “minimum wage” can be distinguished:

1. Federal level.

It is approved by a separate all-Russian law. It is the same for all regions of the country. The amount is regularly indexed upward taking into account inflation and from 01/01/2018 – taking into account the level of the cost of living for the second quarter of the previous year.

2. Regional.

Based on the cost of living and climatic conditions, each region has the right to set its own minimum wage. However, it cannot be lower than the federal one and is mandatory for all employers. The exception is those who receive funding from the federal budget.

3. Regional.

Applicable to the Far North and territories equivalent to it.

Many regions adhere to the federal wage level. Thus, the minimum wage in 2018 for most regions was 9,489 rubles per month.

Its maximum value at the end of 2017 was 18,742 rubles in Moscow and 18,750 rubles in the Magadan region.

The price of life

The living wage is an estimate of the cost of a conventional consumer basket. It includes the minimum set:

• food;
• costs of paying mandatory taxes and fees;
• "communal";
• non-food products;
• services to preserve human health and vital functions.

The composition of the consumer basket is constantly changing. It is reviewed at least once every 5 years for all population groups. Although it has not changed for 2018.

If the income of citizens is less than the subsistence level, then they are considered low-income.

The role of the living wage

Its main functions are:

1. Helps reflect statistics on the standard of living of the population; Based on this data, officials develop and implement various social programs.
2. Helps plan national and regional budgets.
3. Justifies the size of the federal minimum wage, as well as benefits, scholarships and other social payments.
4. Promotes the provision of social support to low-income individuals.

The cost of living is set separately for:

• able-bodied citizens;
• children;
• pensioners;
• on average per capita.

The cost of living is federal and regional. Each individual region has its own amount. This difference can be explained:

• features of natural and climatic conditions;
• national preferences regarding certain food products, the use of various services, non-food products, services, etc.

Convergence of indicators

The labor legislation of the Russian Federation determines that the minimum wage cannot be lower than the subsistence level. But in fact this was not always the case.

EXAMPLE

In 2015, the federal minimum wage was 5,965 rubles, and the national average subsistence level was 10,404 rubles. Thus, the difference between the minimum wage and the subsistence level in 2015 was 57.3%.

Of course, the way out of the situation is in the equation of these quantities. Therefore, starting from 2019, a fundamentally different mechanism for establishing and increasing the minimum wage will begin to operate. The minimum wage will be set equal to the subsistence level of the working population in Russia as a whole for the second quarter of the previous year. That is, officials will take the cost of living in the second quarter of 2018 as the basis for the minimum wage in 2019. And then a separate federal law will approve the updated minimum wage.

With this outcome, the minimum wage will give citizens more certain social guarantees.

For more information about this, see “