Minimum wages in Russia and Central Asia

(February 2015) {{Legal minimum wages play a very important role in countries in Eastern Europe and particularly Russia, Kazakhstan, Kyrgyzstan and Tajikistan. EPSU affiliates in the region are active with other unions not just in pushing for increases in the rates but in debates about the content of the basket of goods on which living wage calculations are based.}} {EPSU's affiliates in the region meet in Dushanbe, Tajikistan on 3-5 March 2015 and in her report for the meeting, EPSU's regional officer, Olga Zhankevich, provides information on the latest developments on minimum wages. } Trade unions in the countries of the subregion submitted proposals and commentary regarding minimum wage increases for consideration during the drafting of the national budgets. Negotiations were held with the representatives of the countries’ governments, parliaments, and employers about the need to considerably increase the minimum wage. Talks were also held about joining the ILO Minimum Wage Fixing Convention No. 131. So far, this convention has only been ratified by Kyrgyzstan. When signing general and industry agreements, trade unions have been demanding that public authorities and employers associations include obligations to increase the minimum wage and set it no lower than the living wage. In some countries, trade unions helped revise the elements of the consumer basket and methods to define the living wage. Trade unions have been mobilising in demonstrations and rallies to set the minimum wage no lower than the living wage. The concerted efforts of trade union associations yielded some positive results with authorities in some cases changing their position on minimum state guarantees for labor remuneration and increasing minimum wage rates more regularly. Minimum wages had remained unrevised for five or even nine years in some countries, whereas now the minimum wage is revised annually in most countries. The minimum wage in Russia currently stands at €81, while in Kazakhstan it is €96, in Kyrgyzstan €15, and in Tajikistan €41. The purchasing power of the minimum wage has increased. In 2014, the minimum wage in the capitals of the subregion’s countries could buy more baskets of the nine key food products than in previous years. However, the purchasing power of the minimum wage has not reached pre-reform levels in any of the countries, largely because most countries lack a mechanism to index it. {{{Union action on the minimum wage in Kazakhstan}}} The Trade Union Federation of Kazakhstan has persuaded the government to consider issues repeatedly raised by it with respect to increasing the quality of employees’ working and living conditions. This firstly entails revising the correlation of the food and non-food parts of the living wage and the percentage of non-food products and services in light of the structure of consumer spending and regional climatic conditions. The composition of the food basket is also expected to change – namely, the number of standard rates of consumption will increase. Coming legislative changes include drafting and adopting the Kazakh law “On minimum social standards and guarantees,” revising the Kazakh law “On the living wage” that has been in force since 1999, and ratifying the International Labor Organization’s conventions. {{{Kyrgyz unions focus on living wage target}}} The Trade Union Federation of Kyrgyzstan insists on strict compliance with the provisions of the General Agreement, according to which the minimum wage should be set at the level of the living wage by 2017-2018. If the government fails to deliver on its obligations, the trade unions are ready to resort to such methods as rallies, strikes, and ultimatums. {{{Campaigning in Russia}}} The Federation of Independent Trade Unions of Russia pursues its campaign in the following avenues: - insisting on compliance with the provision of the 2014-2016 General Agreement, according to which the minimum wage is set at the level of the living wage by 2016. However, these efforts are complicated by the Ministry of Economic Development, which set Russia’s socioeconomic development forecast for 2015-2016 without regard to an increase in the minimum wage. The Federation of Independent Trade Unions of Russia constantly voices its position and policy regarding the time frame for setting the minimum wage at the level of the living wage, and it has submitted these demands to the country’s political authorities. The trade unions insist on solving this problem as soon as possible; - protesting against a bill drafted by the Russian Labour Ministry that includes compensatory and incentive payments in the minimum wage. Thanks to the trade unions’ tough position during negotiations on this issue, the bill suggests that specific figures be set for the minimum wage over the next three years, while leaving the legislation on including compensatory and incentive payments into the minimum wage unchanged; - insisting that the minimum wage be based on a minimum consumer budget and that the living wage be used to set the size of the social allowance. The inclusion of a provision in the General Agreement that envisages consultations to develop a method for calculating it is the first step towards defining a new criterion for establishing the minimum wage; - resisting attempts to introduce minimum hourly labour remuneration, which is envisaged in Bill No. 429706-6 “On amending the Labor Code of the Russian Federation” and the Federal Law “On the minimum wage,” which will worsen conditions for employees, especially part-time employees. {{{Major success for unions in Tajikistan}}} The Federation of Independent Trade Unions of Tajikistan secured a major victory with the minimum wage increased 36-fold. At the insistence of trade unions, a law was passed on the living wage. Trade unions are currently insisting on the rapid development and approval of guidelines on the composition and structure of the consumer basket, which will make it possible to calculate and approve a formal figure for the living wage and use it as a criterion for establishing the minimum wage. {{{Still a long way to go}}} However, the efforts taken by the trade unions of most of the region’s independent countries have yet to reach their target. In Kazakhstan, the minimum wage is based on the living wage in order to calculate basic social benefits, which is 12% below the living wage for an employable person. It is 16% (6%) in Kyrgyzstan and 63% (26%) in Russia. {{{Trends in the public sector}}} With respect to the public sector industries in the region, the minimum wage largely corresponds to the national rate, and as a rule, it is below the living wage. Under pressure from trade unions of education and science workers, Kazakhstan and Kyrgyzstan have established minimum wages above the living wage for the main employee categories. Wages for healthcare employees have also been increased significantly in Kazakhstan and Tajikistan. In accordance with the General Agreement for 2014-2016, Russian trade unions are helping implement Decree No. 597 of the Russian President dated 7 May 2012 “On measures to implement government social policy.” This decree calls for an increase in the real wage for public sector employees, and trade unions insist on implementing the decree in full. Representatives of the Federation of Independent Trade Unions of Russia draft annual general recommendations on establishing remuneration systems for employees in state and municipal organizations at the federal, regional, and local levels. In 2013, education, healthcare, and culture workers in Russia saw an increase in their wages by, 23%, 19%, and 21%, respectively. This trend is continuing in 2015. However, in some countries, the minimum wage in public sector industries remains below the living wage. At the same time, there is a clear tendency towards a low minimum wage in the industry in countries where government guarantees are low.

More like this