Ukrainian government plans to raise the minimum monthly wage in Ukraine by 523 hryvnia (20 US Dollars) in 2018, to the amount of 3723 UAH ($143). Yes, it’s a monthly payment, not per week.
In 2016 the average monthly earnings of Ukrainians were only 5183 hryvnia, which is only 198 US Dollars or 175 Euro.
How wages in Ukraine will change by 2020
The minimum wage was increased by 100% in January 2017: From 1600 to 3200 UAH ($61.4–122.8). It was a big step, since certain social payments are based on this parameter. With higher wages, the size of unemployment benefits also increased.
The government projects that by the end of the year the average monthly paycheck will reach 7104 hryvnia ($272). But because we are talking averages, it means there were be still plenty of people working 8-hour shifts 5 days a week, and taking home less than $200.
Besides, women in Ukraine earn on average 25% less than men. Females are among the lowest paid employees in the country.
Some of Ukrainian women on Elenasmodels.com reported that they earn only around USD $100 monthly working as teachers or medical personnel in a hospital.
At the same time, as we reported earlier, there are no plans for future rises in 2017.
The government expects that social standards are going to rise by 6-10% every year, according to Segodnya.ua.
- In 2018 the minimum wage will reach 3723 UAH ($143).
- By 2019 it will rise up to 4173 UAH ($160).
- By 2020 it should grow to 4425 UAH ($170).
How much Ukrainians will earn by 2020.
Inflation vs. indexation of social standards
According to Finance.ua, before 2014 the level of the lowest remuneration tended to increase at least to the level of inflation in the country. In fact, the level of earnings, transferred to US Dollars, kept increasing.
But in 2014 prices rose almost by 25% and there were no corresponding growth in remuneration.
- What happened in 2014? Read the short course of modern Ukrainian history here.
During the period that is now known as the “economic crisis of 2014-2015”, inflation in Ukraine had been galloping ahead, while the average paycheck remained nearly the same.
- For instance, in 2015 the inflation index grew drastically by approximately 43%, but social payments were indexed only by 14%.
- Because the exchange rate between hryvnia and US Dollar kept discounting the Ukrainian currency, people’s standards of living dropped substantially.
Experts insist that the minimum salary should not only be defined by the government but depend on the real economic situation in the country. They argue that the perfect size of the minimum salary should equal 60% from the average wage in the country.
Nevertheless, the fact that the minimum salary is being increased has economic consequences.
- Income of poorest Ukrainians rises.
- Fines for employers, which are linked to this figure, increase.
- Contributions to Pension Fund grow.
However, when discussing the rise of the minimum salary, the officials leave out such figures as prognosis of the exchange rate to US Dollar or Euro. But it is this rate that determines how much goods cost for regular Ukrainians.
Read also:
- Monthly income of Ukrainian families is only USD 111 per person
- Ukraine is #2 in the world for income equality
- What can you buy for 1 US dollar in Ukraine?
- Average Income in Ukraine, Average Wages by City
Wow!! What a wage inflation! Getting from 1,600 UAH to 10,600 UAH in just over 5 years! Nowhere else in the world Minimum Wage is rising so fast. Yep. Ukraine has finally a good government nowadays! However, prior to Majdan Revolution you have had weak and bad governments for nearly 30 years and they wasted and plunged country’s wealth. Otherwise, Ukraine would be already in TOP 20 countries at this moment.
Sorry, but you mistook the bottom diagram with the top
And your ideas about the modern Ukrainian government are also wrong
Social security payments are not based on this indicator ( the minimum wage) but on the Subsistence Minimum. It is 1684 UAH.
The minimum pension is 1312 UAH
Probably, the government wants pensioners to die faster from malnutrition
Werra,
Employees have to pay higher social contribution per each employee (it’s based on the size of the wage), also taxes for real estate and certain fines are based on this parameter. Here is more information. But yes, social security payments were “unlinked” from the minimum wage and linked to the official sustenance level, together with January 2017 rise of the minimum wage.
U.S.A is the best place to be.
Norman, for you — possibly. I live in Australia and I think it’s the best place to be, and I wouldn’t want to live in the USA. Have you lived in any other country than the USA?
Raising minimum wage does NOT help or make business sustainable. It does NOT help the Ukrainian people. It does NOT give an individual more money to spend. The Fact is raising minimum wage will/does: 1. cause business to hire LESS entry level workers because the cost has risen to hire individuals with no work experience. 2. Raise the cost of living. All products are made of mother earth and labor. Labor is the most expensive. Labor includes paying employees and ALL expenses involved with paying any employee. Labor includes marketing costs. All persons must be paid in the manufacture and… Read more »
You think minimum wage hurts a country’s businesses and economy?
The 4 countries with the lowest minimum wages:
Sierra Leone, India, Afghanistan, Phillipines,
The 4 countries with the highest minimum wages:
Australia, Luxemborg, Belgium, Ireland
Now tell me which countries have better businesses and economies, the low minimum wage or high minimum wage countries?
Ironically (when compared to your comments), Australia has easily the highest minimum wage in the world and is the ONLY western country to not have a recession in the last 25 years.