A big rise in the level of living wage and minimum wage in Ukraine could unbalance the state budget and accelerate inflation, economic experts polled by the Sotsiopolis center for social and political studies and technologies have said.
According to a report by the center, experts called the law “On the living wage and minimum wage for 2009 and 2010” an untimely, risky decision with an election background.
According to Head of the Institute for Economic Research and Policy Consulting Ihor Burakovskiy, the parliament did the people a “disservice.”
At the same time, Burakovskiy said that the social standards set by the government in the draft state budget for 2010 are well-considered and they don’t threaten the macro economic stability of the country.
President of the Centre for Economic Development, Oleksandr Paskhaver, also called the decision made by the Verkhovna Rada an unfortunate one. According to him, it is a political compromise.
“I’m worried about the very fact of the consideration such laws when the country is in a difficult economic state, when social standards are raised not as a result of improving the economic situation, but because of political reasons,” Paskhaver said.
Deputy Head of the National Institute for Strategic Development, Yaroslav Zhalylo, in turn, said that the sharp growth of almost 1.5 times of the minimum wage would lead to a rise in the cost of labor both in the budget sector and the sphere of production.
One of the prospective candidates for the post of the Ukrainian president, banker Sergiy Tigipko, also criticized the parliament’s approval of a draft law on the living wage and minimum wage for 2009 and 2010.
As the banker’s press service reported on Tuesday, the politician said that a positive vote on this issue was a condition for the Region Party’s unblocking the parliament’s rostrum. Tihipko said this was too high a price for unblocking the parliament’s work.
“All countries are lowering social standards during the crisis and are using the money to revive their economies. Our lawmakers are ready to warm themselves by a fire that is burning away the country’s future,” the banker said.
Ukraine needs an additional UAH 8 billion this year to implement this law, he said. Passing this law when the country is facing fiscal deficit will only boost wage arrears, the banker said.
As reported, on Tuesday the Verkhovna Rada, Ukraine’s parliament, approved at first reading a draft law on the living wage and minimum wage for 2009 and 2010.
A total of 259 of 444 MPs registered at parliament voted for the draft law submitted by Oleh Zarubynsky, a member of the Bloc of Lytvyn faction.
The draft law foresees a living wage of UAH 701 per month (per person) from November 1, 2009, UAH 825 from January 1, 2010, UAH 839 from April 1, UAH 843 from July 1, UAH 861 from October 1, and UAH 875 from December 1.
In addition, the draft law foresees a minimum wage of UAH 744 from November 1, 2009, UAH 869 from January 1, 2010, UAH 884 from April 1, UAH 888 from July 1, UAH 907 from October 1, and UAH 922 from December 1.
