What factors determine the size of MROT

The size of SMROT in Russia

is used not only to regulate working relationships, but also to determine the amount of disability benefit, pregnancy and childbirth as well as for other purposes of compulsory social insurance.$ Also in Russia, taxes, fees, penalties are calculated on the basis of SMIC.

Distinguish between federal and regional levels of SMIC. In 2014, the size of the all-Russian SMIC is 5554 p., it grew by 6.7% to the level of 2013.

Compared to 2007, the size of the SMIC increased more than twice – from 2300 p.

Each region may have its own size fixed on the basis of its economic specificities. For example, in Moscow, the SMIC is revised 2 times each year – 1 January and 1 July. In 2014 it is 12,600 p. (in 2013 – 11,700 p.).

Today in Russia there is a situation in which the fixed SMIC is lower than the official living wage. The latter is calculated on the basis of food basket, non-food products and services that are necessary to ensure human life.

In general, the low level of SMIC in Russia is a rather acute socio – economic problem, as it leads to lower wages and illegal salaries, $ which does not take into account taxation and which does not pay pension contributions.$

According to the MER, the living wage (poverty line) on average in Russia in 2013 was 7,911 p. Last year, the percentage of SMIC to subsistence was 65.8 per cent.

Increased SMIC could help reduce the proportion of workers with wages below the subsistence wage (currently reaching 14 per cent of the total number of people working), as well as increasing tax revenues.

At the same time, a higher SMIC should lead to an increase in social benefits, in particular, in the amount of pregnancy allowance.$ According to the Ministry of Health and Social Development, for these purposes it will be necessary to allocate 55 billion rubles from the budget.

According to government estimates, the SMIC should reach the subsistence level no later than 2018.

The criteria determining the level of SMIC in Russia

is subject to indexation every year based on the economic situation in the country. In particular, its magnitude is affected by inflation and the cost of the consumer basket.
In accordance with ILO Recommendation No. 135 on Minimum Wages with Special Consideration of Developing Countries, the following criteria affect the level of SMIC:

– Workers ‘needs; $ total salary
– Cost of living and standard of living of other groups
– Social Security benefits.$

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