THE POLICY OF MINIMUM WAGES IN RUSSIA AND ABROAD

Abstract

In this paper the negative social and economic consequences of raising the minimum wage for the regional economy on the example of Krasnoyarsk Region are discussed. It is shown that in Krasnoyarsk Region regional coefficients and northern wage surcharges have been established, and according to the Constitutional Court Decree No. 38-P of 07.12.2017 employers are obliged to charge them in excess of the minimum wage. As a result, the social guaranteed minimum wages in the region is even higher factually than the subsistence level. This situation leads to a fairly rapid growth of the minimum wage, which is a socially significant phenomenon. It should be noted that despite this expansionary wage growth, this social security measure remains incommensurable compared to similar values abroad. At the same time, the burden on the business sector is excessive, which implies negative consequences for the entire economy and, above all, the growth of the informal sector in the labor market and shadow economy growth as well. Various foreign and domestic theories of the minimum wages regulation are discussed in this paper. This policy should include certain leverage to support small business. It is also necessary to study the impact of the minimum wages growth on the economy of the region and to evaluate its socio-economic consequences. It is suggested that regions should be given the right to establish the minimum wage.