Will Russia be saved by larger minimum wage?

 Will Russia be saved by larger minimum wage?

Russia's Deputy Prime Minister Olga Golodets asked the country's Vladimir Putin to ask authorities with raising the minimum wage today at a meeting of the Presidential Council on Strategic Development and Priority Projects.

"I ask you, Vladimir Vladimirovich, to give an instruction, including to the Ministry of Labor, because this is a key issue in terms of productivity. The increase in the minimum wage will immediately rid our system of the lowest-performing jobs," Interfax cited Goodets as saying.

The vice-premier assured that the government is ready to assist those who occupy low-productivity jobs, that they were pre-retrained and did not feel any difficulties.

A professor of the RANEPA Chair of Economics and Finance of the Public Sector, Lyudmila Pronina, speaking to Vestnik Kavkaza, explained that an increase in the minimum wage is not linked to the productivity.

"The minimum wage is the standard, but now, unfortunately, it is not being fulfilled, and there are not many places where people actually receive the minimum wage, which now amounts to 7500 rubles," the expert recalled.

According to her, even if you raise the minimum wage to the subsistence minimum, which is an average of 9,800 rubles in Russia, this means only a ban for the employer to set wages below this level.

Lyudmila Pronina stressed that labor productivity may be improved due to investments, thanks to which it would be possible to create jobs in high-tech industries, first of all, in IT, in single-industry towns, in defense industry, where wages and productivity would be adequate to each other.

The introduction of the self-employed population into the legal field could be another measure to increase productivity, whose number now reaches 15 million people. "If they were registered, paid taxes, it would increase GDP and labor productivity. But they are registered under the preferential regime until 2018," the professor of the RANEPA Chair of Economics and Finance of the Public Sector said.

Finally, the economist recalled such a significant factor as anti-Russian sanctions.

"Thus, the growth of labor productivity is primarily the growth of GDP and, of course, effective work," Ludmila Pronina concluded.

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