Pinzenyk called a minimum wage of 3200 hryvnias PR

Pinzenyk called a minimum wage of 3200 hryvnias PR

People’s deputy and economist Viktor Pinzenyk criticized Prime Minister Volodymyr Groysman’s statement about raising minimum wages to 3200 hryvnias. He wrote this on his Facebook page.

Reported by the ANTICOR portal with reference to the media.

“Could our minimum wage reach 3200 UAH in just one year? Of course it could. If there’s a strong desire. You could set it at several tens, even hundreds of thousands. And achieve that level. I’ll note immediately that on that scale one can ‘inflate’ the so-called nominal or paper (banknote) wage. But there’s a little thing called the economy — more precisely its scale, how much we produce. And they expect to receive next year a little less than 2,6 trillion UAH, which on average is about 5 thousand UAH per citizen per month. But not everything can be consumed, because there must also be accumulation.”

The minimum wage in Ukraine is tied to the pay scale. In that scenario we would have to reach an average wage of almost 12 thousand UAH (the average wage now exceeds the minimum by 3,6 times). The economy cannot support such a wage, because you can’t consume what doesn’t exist. But there is another channel — inflation. It can provide any wage. I remind you: nominal.

I’m familiar with the option where the minimum wage is detached from the pay scale and it is proposed to top up those who earn less. According to the latest reporting data, wages up to 3000 UAH are received by 39% of those employed in the economy. Now all of them will have the same wage. And you won’t be able to accelerate much for the rest either. Because the economy constrains.

It’s worth paying attention to one more thing. I find it hard to imagine that a decision on a minimum wage of 3200 would be voted through while at the same time leaving the minimum pension at 1372 UAH unchanged, as provided by the draft budget. Such a gap between these social standards has never existed in Ukraine before. And it’s worth reminding that current pension fund revenues allow payment of only 700 UAH in pensions. Will the paper bear it? Somehow pension payments are being pulled out now. They’ll pull through additional ones too. Somehow…”

“Did I oversleep something? Maybe Ukraine has been hit by another natural disaster, namely elections?” Pinzenyk wrote.

Recall that Volodymyr Groysman promises a minimum wage of 3200 hryvnias in the year 2017. The senior official made this statement while opening a Cabinet meeting.