In Q1 2018 the real wages increased by 9.5% and experts believe this is a very optimistic figure. Deputy Head of the Analytical Center Gleb Pokatovich told RBC-TV about the factors that contributed to this increase, whether it is still going and what workers should do in this situation.
People Need Opportunities to Earn Money
According to the expert, this increase in wages has to do with payments in the public sector. "Q1 saw workers in the public sector getting very handsome pay as the salaries there are currently quickly catching up with the country's average," Mr. Pokatovihc explained. "Last year the situation was drastically different: public sector pay was rising slowly and always lagging behind the country's average."
"Wages are rising in the sectors that are turning a profit. These are extractive industries, the food industry and the tobacco sector," the expert continued. According to him, every industry focused on consumer demand is doing pretty well. Mr. Pokatovich noted another important factor that contributed to the increase in wages. "People were not being paid enough in previous years. In 2016 real wages fell by about 10%, the increase in 2017 was just 3-4%, now if we want to go back to the pre-crisis level, wages have to be raised at an accelerated rate," he stated.
At the beginning of this year payments were not of a one-off nature, Mr. Pokatovich noted. "Early last year pensioners got a lump sum that significantly influenced statistics but this time around one of the factors has to do with maintaining the level that has already been achieved," the expert believes. Secondly, in the public sector the minimal employee pay was brought up to the living wage level, he pointed out. The rest, according to Mr. Pokatovich, is going to depend on the financial performance of the different industries. "The industries that do well financially are going to spend more money to attract more people. Unemployment is already pretty low at just about 5% so competition for skilled labor is going to push wages up," he is convinced.
The Presidential decree "On the national goals and strategic objectives for the development of the Russian Federation in the period until 2024" calls for sustained growth in real household income. In order to achieve that goal, people need to be given opportunities to earn money, Mr. Pokatovich believes. "It should be noted that the decree does not give any information on wages. That is not about simply giving people money," the expert stressed. " One of the most important components of the decree is the development of small and medium enterprises. Broadly speaking, the goal is to create conditions that would allow the economy to grow and develop and if you have such an economy you are going to have plenty of money to pay people." If you get new skills, employers would compete for you, the expert said.
Source: RBC TV