Olga Magomedova, Researcher of the International Best Practices Analysis Department at the Gaidar Institute, told RBC, how changes of the rules to calculate minimum wage index will influence the labor market in Russia.
According to the expert, wage growth in Russia is linked not only to a labor shortage but also to a new government policy. The minimum wage index is now calculated based on the median wage, rather than the subsistence minimum. This change in calculations automatically raises the bar for minimum wage expectations.
However, at the macro level, despite positive social impact, the negative consequences will likely outweigh negative ones, according to Olga Magomedova. The main question is as follows: will wage increases be linked to increased productivity
"In a healthy economy, these two factors should be aligned. However, if only labor costs rise, we end up with 'poor expensive workers', i.e., they earn more, but are also forced to spend more on increasingly expensive consumer goods. This means that quality of life doesn't improve, there are no resources for investment, and the economy does not grow," Olga Magomedova explained.