$150 minimum salary in Ukraine will become a reality in 2019, officials promise
There are lot of people in Ukraine who only earn the minimum wage and their salaries are not even showing in the country’s statistics.
The reason for that is the way average wages are calculated: Only companies with 10 employees or more are included in statistics.
Small businesses that often pay low remuneration — as little as possible — are excluded and millions of employees on minimum wages aren’t weighing down the numbers. Moreover, according to Transparency International, about 46% of the Ukrainian economy goes under the wire. People working with no official contracts are a usual occurrence in today’s Ukraine.
Nevertheless, the minimum wage is the measurement that most employers have to abide by.
Teachers, for instance, often only get paid the minimum salary and their wages are 100% “white”. In other words, they aren’t getting a top-up via “cash in the envelope” as some other categories of workers who are employed in non-government industries.
Vice Prime Minister of Ukraine Pavlo Rozenko promised that pensions and minimum salaries will be raised on 1 January 2019, KP.ua reported.
Currently many Ukrainian pensioners are paid only $55 a month, which is the minimum retirement payout for seniors. Pensions are linked to sustenance level, which has been raised on 1 July 2018.
Earnings of Ukrainian workers
A median number reflecting earnings of workers would be more interesting than the “average” salary. Small number of top-earning officials or managers can skew the averages substantially. It is the low income employees that most often agree to “informal” job arrangements without contracts, as it helps them to save on taxes while getting “cash in the envelope” that equals the least amount allowable by law.
By agreeing on “grey” or “black” pay check people are also able to qualify for subsidized (discounted) payments for electricity and water, which is another factor why employees agree to such arrangements. Sometimes a higher official pay check means losing the subsidy and it will eventuate in people getting less cash to live on.