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Wages Decrease
October 23, 2014 14:35


 Employers are reluctant to raise wages, and inflation demolishes the bonuses put in the beginning of the year due to the economic stagnation. As a result, the Russians employed in the private sector are expecting one of the most serious decreases in real wages at year-end in recent years, the experts warn.

According to the calculations of HayGroup, as of June 1, the growth of nominal wages made up 6.8% since the beginning of the year. The Research Expert of HayGroup in Russia Irina Chernozubova said that there have been no significant changes in this indicator since that time.

At that, the inflation made up 5.6% on September, 1. Thus, the growth in real wages made up 0.8% by the beginning of the autumn. “According to our statistics, the majority of companies raise salaries from January to April, and a very small number of companies plan to raise wages in the fourth quarter. Basically, the increases predicted by companies are usually scheduled for January” – Chernozubova says. In normal circumstances the wages are indexed once, sometimes twice a year, as the Head of Analytical Department of the recruitment portal Valeria Chernetsova thinks.

“But in the present situation many companies simply froze the compensation” - she says. This means that the dynamics of real wages can go into the red by the end of the year. According to the data of Federal State Statistics Service, the inflation at an annual rate made up 6.3% at the end of September. Besides, the Central Bank expects the inflation at the 8% level at year-end, and the head of the Accounts Chamber Tatyana Golikova believes that the pace of price increases may be even faster.

“The increase in wages is unlikely until the end of the year, and the real wages will fall due to high inflation” – Chernozubova confirms. The well-being of Russians has increased by 15% in roubles in the last seven years, but fell by 17% in dollars due to the rouble devaluation, according to the Global Wealth Report 2014 from Credit Suisse. 

Author: Anna Dorozhkina

Tags: Russian economy society    

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