On December 29, 2017, Russian President Vladimir Putin signed the law on raising the minimum wage to the subsistence level. From January 1, 2018, the minimum wage will amount to 9,489 rubles ($165) per month.
In Russia, the minimum wage is the monetary value of monthly wages, below which workers may not be offered or accept a job. The minimum wage is guaranteed by the Constitution of the Russian Federation (Article 7).
History of minimum wage in the world and in the USSR
First mechanisms for setting minimum wage for workers were established at the legislative level at the threshold of the 20th century. That was done to resolve conflicts with trade unions. The first relevant bill was passed by New Zealand’s parliament in 1894. In most countries, the minimum wage is set not in a monthly but on an hourly basis.
In Soviet Russia, the concept of "compulsory minimum wage" for the first time was introduced by the Labor Code of 1922.
By the Decree of the Central Committee of the Communist Party, the Council of Ministers of the USSR and the All-Union Central Council of Trade Unions dated December 12, 1972, the minimum wage of workers and employees was set at 70 rubles per month. This amount did not change until 1991.
Minimum wage after 1991
On April 19, 1991, the Supreme Soviet of the RSFSR (Russian Soviet Federated Socialistic Republic) adopted the law on raising social guarantees for workers, which set a minimum wage of 180 rubles per month, starting from October 1, 1991, and 195 rubles - from January 1, 1992. However, already on November 15, 1991 the government of the RSFSR adopted a resolution establishing a minimum wage of 200 rubles from December 1, 1991.
Since 1991 and until the denomination of the ruble in 1998, the minimum wage was raised 17 times by various federal laws or decrees of then Russian President Boris Yeltsin.
Since the mid-1990s, the minimum wage was used in the legislation to determine rates for taxes, for calculation of fines, and others. The minimum wage in the amount of 83.49 rubles remained until 2000.
Law of June 19, 2000
On June 19, 2000, Russian President Vladimir Putin signed the law on the minimum wage, which, with changes, is still effective but was amended several times. Under the first version of this law, the minimum wage was raised to 132 rubles from July 1, 2000.
The amount for the calculation of taxes and penalties became known as the "basic" and was rounded to 100 rubles. Since then it has not changed.
Since 2000, the minimum wage in Russia was changed 16 times.
The threshold of 1,000 rubles was overcome on May 1, 2006 (1,100 rubles.), and the threshold of 5,000 rubles - on January 1, 2013 (5,205 rubles).
From July 1, 2016, the minimum wage was raised by 1,000 rubles to 7,500 rubles.
From July 1, 2017, it will be raised to 7,800 rubles, according to the law dated December 19, 2016.
In accordance with Russia’s Labor Code, the country’s regions may establish a higher minimum wage in agreement with associations of trade unions and employers.
In Moscow, since November 2015, the minimum wage is 17,561 rubles.
Problems in Russia
Although the minimum wage was increased on July 1, 2017, it remained 21% below the subsistence level (9,909 rubles).
In January 2017, Deputy Prime Minister Olga Golodets said that 4.9 million people or about 3.3% of the population receive salaries which are not higher than the minimum wage.
On May 2, 2017, Prime Minister Dmitry Medvedev instructed the government to draft a law on raising the minimum wage to the subsistence minimum.
On September 11, 2017, at a meeting with members of the government, President Vladimir Putin proposed raising the minimum wage to 85% of the subsistence level, starting from January 1, 2018. Putin also suggested that from January 1, 2019 both indicators should become equal. On the same day, the Labor Ministry prepared a draft law on raising the minimum wage to 9,489 rubles. (85% of the subsistence minimum).
In September 2017, Putin said that the authorities would increase the minimum wage stressing that people cannot receive wages less than the subsistence level.
Raising the minimum wage to the subsistence level
On September 29, 2017, the cabinet submitted the draft law "On Amendments to Certain Legislative Acts of the Russian Federation Regarding Raising the Minimum Wage to the Subsistence Level of the Working Population" was submitted to the State Duma, lower house of parliament.
The State Duma adopted the draft law on December 15 and on December 26 it was approved by the Federation Council, upper house of parliament.