Russia Proposes Lifting The Minimum Wage To ₽20,000 From January 1 2022

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By Chris Devonshire-Ellis

Proposal would see increases of 70% to the basic minimum wage from next year

Russia’s State Duma has proposed increasing the monthly minimum wage to 20,000 rubles (US$270). A group of deputies headed by the Chairman of the State Duma Committee on Labor and Social Policy Yaroslav Nilov are planning to submit such a bill to the lower chamber today. If the document is accepted, it should enter into force on January 1, 2022.

According to the deputy, the current level of the minimum wage in Russia is underestimated, as it is hard to live on the current minimum wage level set at 12,792 rubles (there are minor regional variations). Russia’s Ministry of Labor has stated evidence suggesting the cost of living in Russia in 2022 will be about 13,600. Experts believe that the initiative will be adopted if it receives the support of United Russia.

According to the bill’s explanatory notes, it has been prepared to provide “A more equitable minimum wage, ensuring the withdrawal from poverty and poverty of a significant number of the most vulnerable citizens of the Russian Federation”

The papers clarify that the federal law of December 29, 2020 “On Amendments to Certain Legislative Acts of the Russian Federation” from January 1 of this year introduced a new mechanism for calculating the minimum wage and the living wage. In accordance with it, the minimum wage is set annually at 42% of the median salary for the previous year, calculated by the Russian National Statistics office, Rosstat. The subsistence minimum is 44.2% of the value of the median per capita income for the whole of the Russian Federation for the previous year, calculated by Rosstat. These ratios are revised at least once every five years.

The proposed Russian minimum wage of US$270 compares to other countries such as China with Shanghai at US$400, Guangzhou at US$308, and Harbin, on Russia’s border with China at US$248.

Vietnam, which has a free trade agreement with Russia via the Eurasian Economic Union, has a monthly minimum wage of US$69, while India, currently negotiating a free trade agreement with the EAEU, also has differing minimum wage levels with semi-skilled workers in Maharashtra State, a main manufacturing region close to Mumbai having a minimum monthly income of US$158.

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