Minimum wage increase should be postponed until Dec 2021, MP suggests.

Unian

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Photo from UNIAN

Photo from UNIAN

The next stage of minimum wage increase to UAH 6,500 may be postponed until December next year, as offered by Daniil Hetmantsev, head of the parliamentary committee for finance, tax and customs policy, MP with the ruling Servant of the People party.

In an interview with the TSN, Hetmantsev explains that it is necessary to upgrade payments, while it is impossible to do it all at once.

"Therefore, we are revising these standards gradually. Incidentally, prior to our move to raise the minimum wage to UAH 5,000, a third of workers lived below the absolute poverty line. That is, they earned less than they needed to physically survive. Every month, the Ministry of Social Policy recalculates the actual subsistence minimum. In July it was UAH 5,050, and we raised [minimum wages] to UAH 5,000. In other words, we did not raise the minimum wage to this level, but we're close. Next year we should cross this minimum threshold. The raise will be 9.3%," MP said.

Read also Over 25% of population live below poverty line – Ombudsperson The increase in wages could lead to part of businesses going into the shadow by offering employees payments at 0.5 rate.

"Therefore, it seems to me that the optimal amount for raising wages is UAH 6,000, not 6,500. So I would stop at UAH 6,000," he said.

To a clarifying question that the 2021 budget provides for an increase in the minimum wage to UAH 6,500, Hetmantsev said: "It does. But I would postpone the increase until December 1, 2021. Then, I believe, we will pass this year alright. After all, this will have a lighter impact on inflation and exert lower tax pressure on businesses."

Minimum wage in Ukraine: Background

  • The Verkhovna Rada adopted a law on raising the minimum wage to UAH 5,000 from September 1. Along with the minimum wage, pensions also went up.
  • In 2021, the budget lays down raising the minimum wage to UAH 6,500 in two stages.
  • Prime Minister Denys Shmyhal predicts that the scheduled increase will not lead to a significant increase in prices.

Author: UNIAN

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