Raising the Minimum Wage to 3200 UAH: Assistance To the Poor Or Labor Market Abuse?


Senior Economist Volodymyr Dubrovskyy explains to the ‘Dzerkalo Tyzhnya’ newspaper the risks following doubling the minimum wage (MW).

‘The Government should consider increasing the minimum wage from the current rate of not more than 30-40% since the beginning of the year, with a gradual increase over 2017.

We also pay attention to the need to prepare for a possible unemployment increase among low-skilled workers, especially in depressed areas. For this purpose one may reconsider Unemployment Insurance Fund`s plans in 2017 and expand the tools for retraining and employment of the unemployed.

In today’s environment, where Ukraine is, minimum wage raise, which is not supported by real economic growth, is a very risky decision. It can have unpredictable consequences, which are completely opposite to former expectations.  Experts urge the government to the open discussion concerning the contents of such changes. They are ready to join the work of revision in order to minimize risks mentioned above and provide real economic growth.

Read the full interview [in ukrainian].

December 9, 2016