The minimum social guarantee of employees’ wages in Russia: 2020-2021

Abstract

In 2021 the methodological approaches to the assessment of the minimum wage and the subsistence minimum level (SML) undergone significant changes. According to federal law No 473-FZ of December 29, 2020, these minimum social guarantees are to be calculated relative to the median wage (at 42%) and the median per capita income (at 44.2%) for the past year. This article reviews the changes in the minimum social guarantees as regards employees’ wages in Russia and its regions in the past two years. A new methodology for estimating the median wages had not been developed by the start of 2021. According to Law No 473-FZ the federal minimum wage was set using the Pension Fund data at the rate of 12792 rubles per month. The majority of regions used the federal minimum wage as the basis for defining regional minimum wages. A comparative analysis of regional minimum wages in 2020 and 2021 was carried out for two groups of regions, the regions with regular climate conditions and the regions with special (extreme) climate conditions where the regional coefficient for wages is applied. The analysis shows that in 2021 the minimum wage increased by 5,5% compared to 2020 in most regions. The exception is 11 regions of the Russian Federation, where the minimum wage was set at an increased rate compared to the federal level. The article analyses the ratio of the minimum wage and means wage of all employees in 45 regions of the Russian Federation with normal climate conditions and in 16 regions with extreme climate conditions, where a unified rayon coefficient is set up at the territory of the region. The dynamics of this indicator allows for estimating the trends in wage inequality