Low salaries will really help Russia get out of the crisis? • Meduza • RIMA

Low salaries will really help Russia get out of the crisis?

Answers economist Evsey Gurvich

Photo: Peter Kovalev / TASS / Scanpix / Leta

The Ministry of Economic Development published a forecast until 2019, which states that according to most likely scenarios, the real salaries of Russians will decline for at least another two years. Kommersant interpreted these data as evidence that the Ministry of Economic Development is called to save on salaries to help the country get out of the crisis. Medusa asked the member of the Economic Council under the president, economist Evsey Gurvich, whether the reduction of real salaries in 2016-2017 will help overcome the crisis.

Eusei Gurvich

Economist

Reducing real salaries in principle can be an effective measure. If we want to quickly increase the growth rate, we need to increase the profitability of investment. A decrease in the share of wages in GDP can make sense - especially since in the past ten years it has grown significantly, unlike most other countries, where this share is either stable or decreasing.

Reducing the share of salary in GDP to set correctly as a goal, but such things are not that it is easily achieved by the decision of the Ministry of Economics or anyone else; It’s easy to not change the situation. It is necessary to formulate how to move in this direction. This is both an increase in the mobility of the labor market, and bringing to current realities the level of remuneration and employment in the public sector, which we have per capita is much higher than in other countries with emerging markets - and even higher than the average of the OESR countries (the organization of economic cooperation and development - approx. Medusa ) .

The task is not easy, but in this direction it is possible and should be moved. And this is only one of many measures that should be taken. But if you energetically work in all directions, it would be possible by 2018 to be expected to accelerate the growth of the economy. However, it is important to take into account political restrictions: to parliamentary (2016) and then the presidential (2018) elections will be difficult to take unpopular measures.