Wage indexation as a factor of stable food demand and sustainability of agricultural systems

Abstract

The purpose of the study was to analyze the institutional component of the process of indexation of the population’s income in Russia, substantiating the directions of its improvement using foreign experience in this area. The population’s income is the most important factor in creating effective demand, since 2014 the reduction in real available income has had a negative impact on the level of aggregate demand, including for the products of the agrifood complex. Food consumption is a priority human need, but a reduction in real income leads to a reduction in the volume and structure of nutrition. Wage indexation is a widely used tool in many countries with developed market economies to increase purchasing power, increase living standards, and increase consumer demand. There is no universal model of wage indexation in the world; it can be applied to the entire population, or only to low-income workers. In Russia, the institutional framework for income indexation is criticized by experts for the ambiguity in the interpretation of some of the main provisions, for the difference in approaches to income indexation in budget and commercial organizations. The paper substantiates the key principles of wage indexation, which consist in a combination of state and social partner regulation.