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Decentralisation of the minimum wage setting in Russia: Causes and consequences

Published online by Cambridge University Press:  01 January 2023

Anna Lukiyanova  and
Nina Vishnevskaya
Anna Lukiyanova
Affiliation:
National Research University Higher School of Economics (HSE), Russia
Nina Vishnevskaya*
Affiliation:
National Research University Higher School of Economics (HSE), Russia
*
Nina Vishnevskaya, Centre for Labour Market Studies, National Research University Higher School of Economics (HSE), 20, Maysnitskaya str., Moscow 101000, Russia. Email: vishnev@hse.ru
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Abstract

In this article, we study the minimum wage setting reform in Russia that aimed to decentralise the fixing of the minimum wage and to increase the involvement of social partners into this process. The old system of minimum wage setting was based on a single nationwide minimum wage which was differentiated across regions and occupations via a cumbersome framework of coefficients. The new system is a mixture of the government-set minimum wage at the federal level and collective agreements at the regional level. We show that the system of minimum wage setting has become more flexible. The reform succeeded in raising the real value of the minimum wage and increasing earnings of low-paid workers without causing significant negative effects in terms of employment. The reform did not lead to greater regional variation of minimum wages. Nevertheless, it introduced some new imbalances: an unintended consequence of the reform was the emergence of separate regional wage sub-minima for private and public sector workers in many regions. The major challenge in coming years is to strengthen the institutions of collective bargaining, introduce evidence-based evaluation and boost the capacities of government and non-government monitoring agencies.

Keywords

J31J38D33Collective bargainingdecentralisationemployer organisationsminimum wageRussiasocial partnersunionswage distributionwage policywage setting
Type
Non-Symposium Article
Information
The Economic and Labour Relations Review , Volume 27 , Issue 1: Symposium: Public Service Employment Relations and Austerity: Challenges and Consequences , March 2016 , pp. 98 - 117
Copyright
© The Author(s) 2016

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