Raising the minimum wage to a living wage: the money will withdraw from the regional budgets

President Putin recently announced that the minimum wage (SMIC) will be raised to a living wage since may 1, 2018. Previously it was assumed that this is done only from 1 January next year. The head of state is convinced that the positive effect of this decision will feel more than 4 million citizens. So a positive attitude is not shared by sociologists. According to them, the Finance Ministry had no “extra” funds to equalize the minimum wage and the subsistence minimum of 8 months ahead of schedule, and, therefore, the money to implement will be looking for in regional budgets, which could negatively affect the wages of the population.

photo: Gennady Cherkasov

We will remind, in the end of last year the President signed a law to gradually raise the level of the minimum wage. Thus, since may 1 the minimum wage of the able-bodied population of the Russian Federation may be increased to 11 thousand rubles 163.

It is unlikely that this measure can significantly change the mood of people who are at that level of poverty that has developed in Russia, has noted in conversation with “MK” senior researcher of the Institute of sociology Leonti Byzov. “In Russia there is a practice that increases the salary, for example, in connection with the may decrees of or in connection with raising the minimum wage, at the same time removed other cash allowances, because the extra money in the region and they will not appear. The Finance Ministry is no money, — the expert continued. — To raise the minimum wage is supposed at the expense of regional budgets. It is no secret that the regional budgets are very different. Most of the regions and so hardly make ends meet”.

According to Byzova, “this initiative is a purely populist move.” “This is done in order to convey to people that the President cares about the impoverished segments of the population, that he understands that the current minimum wage is impossible to live and it needs to improve. And the funds will have to look into regional “piggy banks”. But will not find them. Therefore, they will be deleted. For example, people will be fired, shifting money from one “pocket” to another. No real impact on the socio-economic processes and on the level of economic development, this measure will not have. It is purely propagandistic character”, — concluded the expert.

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