The minimum wage is ... The minimum wage: calculation, increase
The minimum wage in a month (year), day or hour that an employer must pay and for which an employee can sell his work is considered to be the minimum wage - the minimum wage. This amount of payment is established by law or informally, when, for example, trade unions sign an industry agreement with a consolidated employer, the so-called tariff agreement.
The minimum wage is applied in most developed countries. However, even where there is such a practice, its unequivocal opinion does not exist regarding the benefits or harm. The establishment of the minimum wage is, as they say, a double-edged sword. The International Labor Organization in the UN in 1970 adopted a special convention on the minimum wage, and not all countries agreed to implement it.The minimum wage is a factor that has a positive effect only on the lowest paid workers. Initially, this method was introduced to regulate the standard of living and acted favorably in the fight against diaphoretic working conditions. After all, it is not in vain that it is considered that the owners of production use their market power and set a price that is absolutely unfair to the workers.
And indeed, a way to solve this problem was, in principle, found, since the market alone is not able to set an honest price for labor. The least able workers remain far below the poverty line. This means that the minimum wage is a severe need, consisting in an administrative approach to changing the wage structure itself, as well as to the redistribution of income. This was the only way out of the unjust situation created in capitalist society. Surcharge to the minimum wage is primarily a declaration of war on poverty for improving the welfare of society.
The goals of establishing a minimum wage are, of course, absolutely good and are generally considered correct.But many economists believe that the minimum wage, even if it is established and observed, is not in itself capable of achieving these goals. Since the emergence of a politically controversial legislative base, the population as a whole has endorsed this innovation. But economists vehemently criticize the law on the minimum wage. Numerous studies are being conducted, scientists are studying this issue tirelessly in our days, discussing the benefits and costs of this form of remuneration.
From the first appearance of such a look at the means of fighting poverty, a lot of time has passed, and the controversy does not end. The classical interpretation of the calculation of the minimum wage and the shortcomings of this method appeared already in 1946 (George Stigler). Neoclassical economic theory says that if a surcharge to the minimum wage is set to exceed the equilibrium point, this inevitably leads to a sharp and steady increase in unemployment. Naturally, for big money and the number of employees who want to get this job will be large, but there are fewer employers willing to pay higher wages.
The price of the floor and the price of the ceiling - pricing, limiting their increase or decrease above or belowset level. When the state implements social policy, it is quite right to regulate pricing. In this case, the salary below the minimum wage can not be established, that is, the minimum wage is similar to the price floor itself and leads. Such behavior creates surpluses in the labor supply, which cannot, like goods, be bought up by the state or destroyed. This means the formation of unemployment. The emergence of this situation is justified by such indicators as the increase in the minimum wage, the artificial overestimation of the minimum rates for labor.
And all because businesses increase wage costs for employees, business becomes unprofitable, and, to increase profitability, business owners hire fewer employees who will do more work. It turns out that due to the establishment of the minimum wage, the life of even those hired is improving a little - and only financially, and those who have not been hired are suffering to the full. Of course, the SMIC also has advocates from among the theorists. They cite the term "monopsony" here. This is a market situation with an abundance of sellers and one buyer.The strength of the employer lies in the fact that he can choose the best from numerous proposals and independently influence the setting of wage rates.
Piero Sraffa began to direct criticism of the supply and demand model, and after a while his work served as the basis for many studies in which Jan Stidman, Arrigo Orocher, Robert Viennau, Pierangelo Garegnani and many other leading theoretical economists. They argued that such a model is logically incorrect. Professor Cornell Harry Fields believes that it measures only one sector of the labor market. In his opinion, the two-sector model is much more effective, where mobility is not possible for the covered minimum wage - self-employed and covered minimum wage, that is, working for the manufacturer. In this case, the possibility of detailed analysis. The scientist did not draw a conclusion in favor of textbooks, since the "uncovered" minimum wage sector exists everywhere, surrounding the employment sector. This means that forecasts cannot be reliable.
If in a particular region there is a low population mobility, and also the elasticity of demand for products of various industries is not too high,the establishment of the minimum wage does not affect employment. Just the price of the manufactured product increases, and the buyer is simply forced to buy it. The global economy knows some pretty sad examples, and there are many. The regulation of the minimum wage in different countries takes place in different ways, and therefore quite often import substitution of a product occurs as soon as such an opportunity arises. This leads to the closure of not only enterprises, but also entire industries in the state, so the unemployment rate makes a sharp and irreversible leap upwards. For example, the miners of France for very long increased social benefits, and wages - in the first place. As a result, the industry ceased to be competitive, and the country's last coal mine closed in 2004.
"Against" the minimum wage
Negative effects of the introduction of the minimum wage:
1. Reducing competition in the labor market, obstacles to reducing costs for enterprises, especially during economic recessions and crises, reducing the economy to inefficiency, rising prices, general dysfunction, and people to poverty due to unemployment.
2. A small business dies, a medium one suffers damage, a large one survives, but also with losses.
3The demand for labor is declining - either the working day becomes less or less jobs.
4. Price inflation is coming because business cannot without profit and seeks to compensate for the loss by mortgaging them in the price.
5. There is a flagrant injustice when the poorest and least productive workers are encouraged at the expense of the most qualified and productive.
6. Often leads to the exclusion of certain groups from the labor market.
7. The damage to business is much greater than the effect in the fight against poverty.
8. The poorest population is demotivated even in education, because the possibility of getting a job is practically not guaranteed.
"For" the minimum wage
The positive effects of the introduction of the minimum wage are:
1. The standards for the most vulnerable poorest people are increasing and the average standard of living is increasing.
2. Employees are motivated and inspired to work hard, which is fundamentally different from other social programs and benefits.
3. Consumption is stimulated by an increase in the hands of the poor of their basic money supply.
4. The diligence of employees is stimulated, because the employer requires a lot of money and more work.
5.Staff turnover is reduced, the business trains employees less often, and therefore spends less.
6. The country's social spending is declining, because incomes have increased among the poorest segments of the population.
7. The level of employment, as well as the annual payroll of companies, grows faster where the minimum wage is established. But prices in these sectors are growing faster.
Economists and politicians are constantly offering alternatives to the introduction of the minimum wage, which, in their opinion, will be able to withstand poverty much better and at the same time will not increase unemployment.
1. Guaranteed minimum. Negative income tax, in which each person receives a certain amount of money for living according to a number of criteria, is considered one of the most effective methods in the fight against poverty. A guaranteed minimum in many countries can create a basic income, where the availability of citizenship is the only criterion for obtaining it. Back in 1968, for example, more than a thousand politicians and economists of the most famous signed an appeal to the US Congress, in which they opposed the minimum wage and for guaranteed incomes.In many European countries and in some states, the United States introduced such a benefit, which immediately gave rise to dependency attitudes in society, and especially with an exceptionally high influx of refugees who, with such guaranteed payments, have no incentive to develop and look for work in principle.
2. The reimbursable tax credit is also given a fairly honorable place among the replacements of the minimum wage system. This is not a negative income tax; here you must first earn a minimum, defined by the state.
3. The collective agreement is quite successfully used in a number of countries - Germany, Denmark, Sweden. The minimum wage is not regulated by law, but is negotiated collectively. This is not a replacement, it is a method of determination. The value of the minimum wage, according to the EU, is the lowest in 2015, in Bulgaria, and the highest in Luxembourg: 184 and 1923 euros, respectively.
MROT in Russia
If a Russian has no experience, then all benefits, including those for obtaining a sick-list, are established from the sum of the minimum wage. The size of the minimum wage was approved by the Federal Law of June 19, 2000 N 82-FZ "On the minimum wage". Since July 2016, this amount amounted to 7,500 rubles a month, from July 2017 - 7,800 rubles.In the United States in 2002, the minimum wage was five and a half dollars per hour, and according to UN standards, the minimum wage cannot be less than three dollars per hour.
This is an approximate cost of ten thousand kilowatt-hours of electricity or six hundred kilograms of bread per month. Academician RAS Nigmatulin at the same time for Russia considered otherwise. Electricity cost sixty kopecks an hour, and bread ten rubles per kilogram. Therefore, it is not six hundred thousand rubles a month in the minimum wage in Russia, but only six. So it was appointed.
Minimum wage for fines
In Russia, the amount of the base amount applied to the accrual of fines, fees, taxes and other payments is determined in accordance with the legislation of the Russian Federation, depending on the minimum wage. It was established on July 1, 2000 that amendments to the federal law, which determines the procedure for calculating fines, fees, taxes and other payments under the laws of the Russian Federation, will be made annually. And in 2000, the base amount was eighty-three rubles forty-nine kopecks before January 1 of the next year, then, from 2001, it was equal to one hundred rubles exactly. In other countries, everything is much more complicated.
For example, in Mexico,if the procurement legislation is not enforced, the plan is administratively liable: a fine is imposed on the violators of the Procurement Law in the amount of from fifty to one thousand minimum wages. If the participants violated the contract for a total amount of up to fifty minimum wages, the penalty will be charged in the amount of from ten to forty-five minimum wages with the prohibition of participation in tenders and signing contracts of three to five years. In Russia, the laws on such fines are much softer.
MROT for IP
In accordance with the legislation of the Russian Federation, the minimum wage is necessarily involved in the calculation of contributions that the individual entrepreneur pays to the Pension Fund (PFR) and the Medical Insurance Fund (MHIF). Here you need clear and solid formulas that will be provided.
In 2016, the calculation of the contribution to the PFR was as follows: the minimum wage multiplied by twelve months, that is, for the year. Of this number, we take twenty-six percent plus one percent of the amount that exceeds the turnover of the enterprise in excess of three hundred thousand rubles.
That is, the contribution of the PFR is precisely the fixed amount of the contribution that the individual entrepreneur must make.The percentage required for payment to the FIU is twenty-six percent.
If the entrepreneur’s turnover exceeds three hundred thousand rubles a year, then one percent is deducted from the amount that starts after three hundred thousand, to add to the twenty-six percent, deducted from the twelve minimum wage.
Then, in 2016, the amount of the fixed contribution to the MHIF was calculated as follows: the minimum wage is multiplied by twelve months and subtract 5.1% from this number, that is, the very percentage that is required to be paid to the MHIF.
Now in numbers. Contribution to the pension fund will differ from different entrepreneurs, since the amount will depend not only on the minimum wage, but also on the turnover of its business activities.
But the contribution to the MHIF is the same for everyone. In 2016, the minimum wage amounted to 6,204 rubles. Multiply by 12 months and get 74448 rubles. If we calculate 5.1% from here, we get 3796 rubles. That is exactly what was listed in the Mandatory Medical Insurance Fund.
If an individual entrepreneur started a business not from the beginning of the year, then instead of twelve months, the minimum wage must be multiplied by the number that has passed since the registration of the individual enterprise.