Putin proposes increasing subsistence minimum and minimum wage to ‘outstrip inflation’

President Vladimir Putin has proposed indexing Russia’s minimum wage and subsistence minimum in 2022 to “outstrip inflation.”

“The draft of the federal budget for next year now includes an indexation of the subsistence minimum by 2.5 percent. Of course, this is insufficient, because such parameters significantly lag behind the current inflation rate, which has accelerated in recent months,” Putin said during a meeting on Thursday, November 18.

The president stated that according to the Constitution, the subsistence minimum shouldn’t exceed minimum wage, and suggested that both be increased by 8.6 percent next year. Putin added that he would submit the appropriate budget amendments to the State Duma in the near future.

Based on the president’s proposal, Russia’s subsistence minimum would increase by 1,000 rubles (approximately $14) in 2022 — to 12,654 rubles ($173) a month. Accordingly, the minimum wage would increase by about 1,100 rubles ($15) — to 13,890 rubles ($190) per month.

“Finally, there’s also a very important factor — [one] no less important than the two points I’ve already mentioned. At the United Russia party congress they said the pension indexing rate should be higher than actual inflation. At the same time, I would recall that we have strictly adhered to this rule since 2019. Today, taking into account the significant rise in inflation, it would be wrong to deviate from this principle.”

Vladimir Putin

• The Central Bank forecasts that inflation in Russia will reach 7.4–7.9 percent by the end of 2021. That said, food prices have already increased by more than 10 percent in annual terms.
• The subsistence minimum serves as the basis for calculating various social payments, including benefits for families with children and additional payments for pensioners. The minimum wage is used to calculate temporary disability benefits and serves as a guideline for setting wages in the public sector.