Recently the Ukrainian government published data about the salaries of ministers in 2019. This led to considerable discussions in the media which showed a widespread feeling that ministers earn too much when compared with the average Ukrainian salary of €460.
What strikes a Western observer when examining the data is first of all the great disparity in income between ministers and the fact that, with one exception, they all receive “bonuses,” in many cases large ones.
Thus the minister of interior received an average monthly income of Hr 100.000 (€3,700) and the minister of culture and youth Hr 38.000 (€1,400). None of the ministers had identical incomes. This looks in itself already quite odd, and even more so when compared with the situation in Western European countries. There every minister, whatever his portfolio, receives the same salary, which is constant every month. The notion of ‘bonus’ is absent.
Another oddity is that the Ukrainian prime minister earns considerably less than many of his cabinet colleagues. Those responsible for Interior, Justice, Finance, Economy, Regional Development, Energy, Foreign Affairs, and Social Policy earn much more than he does.
In most Western European countries, the prime minister earns more than a minister, which seems logical. The Netherlands seems to be the odd man out, with the prime minister and ministers taking home the same salary every month.
The question of what constitutes an appropriate ministerial salary for ministers is a subjective and difficult one to answer in every society. It is impossible to find objective criteria.
On what argument, for example, would I base my opinion that the monthly salary of €22,100 of Austrian Chancellor Sebastian Kurz is way too high? On what grounds can I say that the monthly salary €14,000 of Dutch Prime Minister Mark Rutte is too low and that the €29,000 that German Chancellor Angela Merkel takes home every month seems reasonable?
In this discussion, it must be taken into consideration that Ukraine has chosen to develop into a Western European democratic rule-of-law society with a social-market economy. From that perspective, it is important to see how the difference between the salaries of Ukrainian ministers and the average salary in Ukraine compares with the difference between ministers and average citizens in Western European countries.
If one takes €460 as the average monthly salary in Ukraine, Ukrainian ministers earn between 3 and 8 times more than the average Ukrainian. On average their salary is five times higher.
The United Kingdom site www.ig.uk has calculated the ratio between the income of world leaders (prime ministers) and the average salary in their respective countries. They come to the following results: in Germany, the ratio is 8:1 (i.e. Chancellor Angela Merkel earns 8 times more than the average German), for Austria, it is 6.7:1, for France 5.13:1, UK 5:1, Denmark 4.75:1. The Netherlands has an exceptionally low 3.67:1.
On the other side of the Atlantic, the U.S. president goes home every month with a salary that is 6.65 higher than what the average American receives.
What conclusions can be drawn from these Ukrainian, Western European and American income data?
First of all, one has to be very careful of course with how one arrives at certain statistics and how statistics are compared internationally. Therefore the ratios above must be taken with some caution.
On average the income difference between Ukrainian ministers and the average Ukrainian is greater than that in most Western European countries.
This does not mean, however, that this difference is unacceptably greater. The fact that Ukrainian Ministers on average earn 4.7 times more than the average Ukrainian looks in no way shocking.
What seems evident is an urgent need for clearer rules and greater transparency regarding ministerial salaries. They should be identical for all ministers and the Prime Minister should earn more than his colleagues. In view of ministerial responsibilities, a salary of five times that of the average Ukrainian salary does certainly not look
unreasonable.
An important question is if there is a need for bonuses, which seems really be out of line with the Western European and American practice. At a minimum, the rules for calculating and allocating bonuses should be formalized and be made explicit.
In a recent editorial regarding ministerial salaries, the Kyiv Post recalled the particular environment in which Ukrainian ministers work, with many opportunities for corruption and self-enrichment. The Post therefore rightly stressed the need for effective law enforcement and anti-corruption measures so that corrupt officials will be punished.
There are clear indications that the ministers in the current government are clean. Therefore, there seems to be no reason to oppose salary levels five times the average at this moment, if at the same time, it actively builds up law enforcement and steps up the fight against corruption.
