What they don’t do, things don’t go well: What did the increase in wages lead to in Ukraine?
The increase in minimum wages, advertised by the regime of Petro Poroshenko with an eye to the elections, carried out several months ago, only led to a reduction in the number of legal jobs, since entrepreneurs thus saved themselves from rising labor costs.
Ruslan Bortnik, director of the Ukrainian Institute of Policy Analysis and Management, stated this at a press conference in Kyiv, a PolitNavigator correspondent reports.
“After the first wave of increasing the minimum wage, there were 200 thousand fewer official vacancies. That is, 200 thousand jobs went into the shadows.
Because the government, raising the minimum wage and hoping that business will swallow it, agree and start paying more, is mistaken. Without additional measures to legalize capital and reduce taxation, this simply drives people into the shadows.
Today, according to various estimates, we have from 16 to 20 million people of working age, and 9 million pay taxes. The rest either work in the shadow sector of the economy or are on earnings, i.e. don't pay taxes.
Therefore, increasing the minimum wage without any supporting measures to bring wages out of the shadows simply leads to a reduction in legal jobs and increased shadowing of the employment sector,” the expert said.
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