Minimum wage for high achievements

Increasing this indicator may be a political slogan, not a tool to fight poverty

Prime Minister Dmitry Medvedev instructed the government to develop a bill to gradually raise the minimum wage (SMIC) to eventually equate it with the subsistence level of the able-bodied population. To date, these indicators have drastically diverged from each other, which has deprived the institution of the minimum wage of its original function - to provide employees with an acceptable standard of living.

Now the gap is 3 thousand rubles. The minimum wage in Russia (7500 rubles) covers only 72% of the cost of the consumer basket of essential goods, mainly food and clothing (10466 rubles). The fact that the minimum wage cannot fall below the subsistence level is written in the Labor Code, adopted back in 2001. Since then, the minimum wage has increased 30 times, but this norm has not been observed.

The government says that the benchmark for increasing the minimum wage is achievable within the next three to five years. There are few reasons to believe these promises - similar words are repeated from year to year, and the ratio of the minimum wage and the subsistence minimum fluctuates around the same values. But this scenario cannot be called unrealizable. In order to find the money to raise the minimum wage, the authorities may cut other social obligations if they consider this path more promising politically. The task is facilitated by the systematic reduction of the subsistence minimum, which Dmitry Medvedev is also involved in (the last time the prime minister signed the corresponding decree on April 4). It is quite possible to achieve parity with the minimum wage in this way, but then the meaning of this project is questionable.

With an average salary of 33 thousand rubles, about 40% of all employees in Russia are poor or destitute, according to recent estimates from Rosstat. Three-quarters of workers receive wages on the verge of the subsistence level, which is already “practically impossible to live on” (quote by Deputy Prime Minister Olga Golodets). The "working poor" is certainly not a unique Russian phenomenon. The difference is that in developed countries the risk of falling below the poverty line in the presence of employment decreases by about 2 times, and in Russia by 13%, that is, it practically does not change. Moreover, people with higher education en masse fall into the category of low-paid workers, which is not observed in Western countries.

How can the minimum wage work in a system with such inputs? There are actually few employed people in the country who receive wages at the minimum level - about 1-1.5 million people. Some workers with low official wages provide their needs well through shadow employment. Others, having an income of 1-2 living wages per month, barely make ends meet. It turns out that in Russia equating the minimum wage to the subsistence minimum can be a good political slogan, but this measure has a rather indirect relation to the real growth in the well-being of the working population.

In order for the institution of the minimum wage to play a more prominent role in regulating the labor market, its size should be set at a significant level - 50-70% of the average wage. Now in Russia this ratio barely reaches 23%. A 3-fold increase in the minimum wage not only does not correspond to the structure of the Russian economy, which retains a huge number of unproductive jobs, but may also be fraught with a sharp increase in unemployment. A new round of transferring workers to the informal sector will begin, which will nullify all efforts to “whitewash” employment.

Raising the minimum wage, which the government is talking about today, will not bring significant relief to millions of working, but poor Russians. Meanwhile, the volume of payments of citizens in favor of the state, in the formula of which this indicator is present, will increase: insurance premiums of individual entrepreneurs and various fines. On the eve of the presidential election and possible personnel changes, politicians with a falling rating will be able to recover a little in the eyes of the population. The problems of social justice and the efficiency of the labor market do not really concern anyone here.