The Adequacy of Setting the Level of Minimum Wage in Ukraine

Abstract

The article is aimed at examining the adequacy of setting the level of minimum wage to modern conditions of economic management in Ukraine. At the heart of the State regulation of Ukrainian economy, as in most countries of the world, are social standards, the justified establishing of which allows to stimulate the economic growth of the country, control the redistribution of income in the economy, ensure an adequate level of reproduction of labor and quality of life of the population. One of the key levers of socio-economic policy of the State is the setting of a minimum wage in the legislative order. The author systematizes the basic factors on the ground of which the minimum wage should be determined: subsistence minimum; relation to the average level of wages, taking into account its unevenness in the regions of Ukraine; growth rate of the consumer price index. The level of minimum wage and its compliance with the above specified factors, taking into account the practice of developed countries, is analyzed. The author determines an inadequacy of this indicator of the economic situation and the inconsistency of its dynamics from 2016 to the present time with the basic factors studied. The negative impact of raising the minimum wage on the dynamics of the number of people transferred to part-time and those who were on vacation without wages is defined. Several directions of improvement of the State policy on setting the level of minimum wage are proposed.

Keywords

• minimum wage
• subsistence minimum
• socio-economic policy
• inflation