Labor and demographic economics

Seven Awkward Questions about the Rapid Minimum Wage Increase

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The IMF does not like surprises. And the 2016 budget was approved without any rapid social standards changing. What will be the reaction of the Fund? This was the subject of CASE Ukraine`s economist Natalia Leshchenko column in an ‘Ekonomichna Pravda’ media outlet.

Businesses that sell products on the domestic market could put additional costs after minimum wage increase on domestic consumers` shoulders using low competition in the internal market.
The situation is worse for exporters.

They have no effect on the international markets prices and will most likely have to optimize their costs, including resorting to layoffs.

Putting additional costs on consumers` shoulders could be one of the potential reactions of business after minimum wage rising. How many companies will behave this way? What price pressure`s scale can be expected?

Read the full article [in ukrainian].

November 11, 2016