2 Feb. Press review. The minimum wage and pensions: why so few?

Ukrainian pensioners will be more affected by the sharp inflation over the past few years. After the fall of the economy, in 2015 the indexation of pensions «frozen», the minimum wage in this year’s aggregate inflation «caught up», but the minimum pension is still significantly lagging behind. The vast majority of pensioners receive less than 1500 UAH per month, while the consumer basket, according to estimates by the Ministry, costs the Ukrainians of 3,200 USD.

In Ukraine the minimum pension 1247 hryvnia lives of almost 400 thousand pensioners. This amount can eat modestly for a month. Retirees can afford once a day to buy bread, chicken legs and a few times a week cheap cereals and pasta. But personal hygiene remains very tight budget, expensive shampoos, toothpastes with such a pension could not afford. Besides, even retirees with a subsidy you have to spend money on utilities and travel. On average, after the required minimum spending on day «existence,» the pensioner remains exactly 30 hryvnia. Also, not included is another item of expenditure: for drugs.

The minimum pension will also be enough for exactly 12 trips to the cinema (though it will have to starve, and in a cinema walk, or for the purchase of $ 45.

To buy new clothes or shoes, even if the total savings, with a minimum pension is almost impossible. Cheap modern brands of women’s shoes will cost three minimum pension. The only solution is to look for shoes in second-hand stores.

Retired from Krivoy Rog Raisa Alekseevna last time you bought clothes in 2011 year, the woman gently wears old clothes and asks kids to give her for the holidays, shoes and jackets.

«I have a pension of 1300. Children sometimes help, there is a cottage with a vegetable garden. During summer, try less money to spend, and in winter – more necessary. But, of course, very hard. What do you do? It’s hard on everyone, we survive somehow,» says the pensioner.

By the way, as reported in the Pension Fund, the vast majority of Ukrainians are retired receive pensions below the subsistence minimum. In Ukraine, there are 11.9 million pensioners, of 6.1 million receives less than 1500 UAH per month.

At the moment in Ukraine is not appointed pensions greater than 10.7 thousand. However, all pensions above this amount that have been assigned to the current restrictions remain in force. For example, as described in the Pension Fund, now retired more than 20 thousand UAH receive 2.2 million people. Mostly retired judges. 19 thousand pensioners receive more than 10 thousand hryvnia.

In the last year of high pensions in Ukraine are taxed, but at the moment this rule is cancelled. In 2014, the taxes needed to pay pensions over 10 thousand UAH, and in 2015 the threshold is decreased to 4134 hryvnia (three minimum wages). Such pensioners in the country was more than 416 thousand. The Ministry of Finance decided that after the abolition of 15% tax on high pensions, the budget is about 800 million hryvnia.

In addition, as senior researcher of the Institute of demography and social studies Lydia Tkachenko, the judges, who will retire this year, the restriction «no greater than 10.7 thousand in retirement» will not feel – for them the constitutional court, this rule was canceled.

«People are irritated by this inequality. When the bulk gets 1500 — roughly speaking, the average pension is now somewhere in 1850 hryvnia — and the judge gets 21 thousand. What the judge retired to our poor country for all that… then Let all 21 thousand to pay. Somehow it does not work. Whatever measure of responsibility for their work, they’re retired, they do not work. This responsibility is already there – why should I pay 20 thousand? Moreover, the constitutional court removed him for the maximum size limit», – says scientist.

The pension system in Ukraine is another «injustice». Pensioners who retired early, receive less money. In 2008, the ratio of length (a measure that is taken into consideration at calculation of pensions) increased from 1 to 1.35 – the old pensions are not counted, and new steel assign to the new indicator.

The Pension Fund deficit this year will reach 141 billion. The main reason for the shortage is low salary. Ukrainians from each paycheck to pay social contribution at the rate of 22%, the money is redistributed between existing pensioners. Thus, of the 16 million employed Ukrainians dues are paid only 10 million (the others have the right not to do so).

Thus, ten working Ukrainians must contain 11 pensioners. And the situation will only get worse. According to estimates of the Institute of demography in 2050, in Ukraine the ratio of workers to pensioners will be at 10 to 15.

According to various estimates, up to 60% of employers pay part of the salary in the «envelope», and social contributions not paid full amount. Problems of pension reform – part of the consequences of the shadow economy, experts say.

For the retirement pension women need to work 30 and men 35 years. As calculated in the Ministry of social policy, the Ukrainians with the minimum wage over a lifetime did not earn even the minimum pension, says Alexander Litvin in the article «What you can afford on the minimum pension in Ukraine: why so little» in the newspaper «Today».

The NBU has managed to worsen the inflation forecast for this year from 8% to 9.1%. About the regulator said in its official press release. As stated therein, the decision of the government will affect the level of inflation, directly through the increase in consumer demand of the population — primarily in food products — and the cost of production, and indirectly through inflation expectations of Ukrainians.

A business is not inclined to give startling predictions, and prefers to draw conclusions on the results of the financial year.

«In order to objectively assess the impact of rising minimum wages on the economic situation, must pass at least one budget year. As this innovation is valid only for a month, and besides, half the month was taken on holidays and days on which business was quiet and still as of today you can only rate the prospects and possible risks», — says a senior lawyer law firm «Alexeyev, Boyarchuk and partners» , Inna Mine.

According to her, today the fear, the entrepreneurs do more than expectations of a positive effect.

«If the worker of budgetary sphere doubling the minimum wage refers to the income growth, for the average entrepreneur is first and foremost the increase in costs, the amount of which is tied to the «minimal» (fees, other mandatory payments). The sources of income and, as a rule, the dimensions for the entrepreneur remain unchanged. It is expected that the increase in the minimum wage in the future will have a positive impact on the economic situation, however, the realisation of such expectations is impossible to say yet,» says Mine.

There is a positive from the «minimal salary 3200». As mandatory payments and fees in most cases tied to the minimum wage, the innovation certainly has a positive impact on local and state budgets, foundations, the base of which is formed by such payments.

«As for inflation, this phenomenon depends on a combination of many factors, first and foremost, the stability of the national currency and objectivity of the authorities in the evaluation of the course and the budget for the year. In General, changes in the minimum wage should not have a negative impact on the purchasing power of citizens and, therefore, at the level of the inflation index. However, any conclusions can be made closer to the end of 2017», — sums up Mine.

Days investment banker, head of Dragon Capital Tomas Fiala in an interview with the «Economic truth», evaluating the financial condition of Ukraine, said that without the IMF tranche, the country «will not even reach the election of the President.» According to Fiala, during these three years (2017-2019), the national Bank, Ministry of Finance, state-owned banks and publichnaja company Ukrainian Railways «Ukrzaliznytsya» will have to pay 14 billion on foreign debts, with interest.

«Foreign exchange reserves have now 15.5 billion. Of these 15.5 billion net reserve of — $ 4 billion., the rest of the IMF», — said the expert, Recalling that last year public debt rose to 72 billion dollars for the nationalization of PrivatBank.

Total, according to estimates Fiala, «about $ 46 billion will be raised through foreign debt, about $ 4 billion — internal foreign currency debt. 22 billion in the hryvnia equivalent debt — mostly government bonds, including those 107 billion that was released to capitalize PrivatBank».

Here pochemuk, says the economist, no tranche of the IMF Ukraine will not be able to repay the debt.

«We can’t. Even before the presidential election will not be able to reach. Without trenching reserves will begin to melt. Markets and population will be the trend to «warm up» and begin the spiral that we had in January and February 2015, when the rate was impossible to stop. Therefore, the President and the government, if they want to be re-elected must work with the IMF to increase the cushion of reserves before 2019 year,» concluded Fiala.

At the same time the head of the Center for the development of a market economy (CMD-Ukraine) Yury Prozorov is sure: without privatization and change of economic policy no tranches in 2017 the rate will not help.

«30 temporarily retreated, speculators earned once again on mistrust of citizens to the NBU, but the trend is the devaluation has a fundamental nature», — said the expert, writes Alla Dubrovyk-Rohova in Satya «What goes around comes around «minimal» in the 3200?» in the newspaper «Day».

2 Feb. Press review. The minimum wage and pensions: why so few? 02.02.2017

Февраль 2nd, 2017 by
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