Devaluation, layoffs and debts. Why does Groysman want to increase the minimum wage?
Today, there are three sources through which the Groysman government can realize its promise to raise the minimum wage to 3200 hryvnia (just over $120 at the current exchange rate).
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The head of the Committee of Economists of Ukraine, Andrey Novak, stated this at a press conference in Kyiv.
“The first is the reduction of workers. You see that reductions are already taking place in almost all institutions of education, medicine, science, culture, art, and sports. At this expense, it will be possible to raise the salaries of those who remain,” the expert noted. “The second source is the inflationary effect that the government planned through the artificial devaluation of the hryvnia in the budget resolution it submitted.”
“And the third source: an increase in public debt - both internal and external. From these three sources it is really possible to fulfill the promise of increasing the minimum wage to 3200,” Novak added. – In a normal situation, wages should be raised based on economic growth. But there is practically no economic growth. And even optimistic forecasts of 3 percent of GDP growth for next year, given our very low base, are not the kind of growth that will allow us to double wages.”
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