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US to Raise Minimum Wage to Europe’s Level
The U.S. administration said last week it would support Democrats on legislation to raise minimum wage in the first hike in a decade. The increase will be gradually introduced over two years with small businesses getting tax breaks.
Congress voted in favor of increasing the federal minimum wage on the back of a spending bill for Iraq. Minimum wages in the United States will grow $2.10 an hour, from $5.15 to $7.25 in the first hike in a decade. The increase will be gradually introduced over a two-year period. The bill also allocates $4.8 billion worth of tax breaks over 10 years aimed at small businesses likely to be most affected by the minimum-wage boost.
Some leading economies such as Germany, Switzerland or Italy do not use the minimum wage system, preferring to settle the issue through collective agreements and trade unions. Those countries using the minimum wage use different scales for state and private sectors. Russia has the sole minimum wage standard. An anticipated hike from 1,100 rubles to 1,700 rubles guarantees a paltry share of the GDI.
The United States has signaled with the decision that it is moving to a high social security level, which is an above-65 percent ratio between the annual minimum wage and the GDI per capita. Russia, however, does not even promise to get close to a medium social security level, and the annual 6 percent GDP growth rate is likely to preserve the situation.
www.kommersant.com
All the Article in Russian as of May 28, 2007
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