The increase in the minimum wage along with introduction of structural reforms in the country will have a positive impact on employment in the long-term perspective. This was reported in a commentary of Valeriya Hontareva, the head of the National Bank of Ukraine, speaking about the influence of minimum wage increase on national employment rate.
Hontareva noted that the estimates provided in the inflation report were related to the official unemployment data, but not “resignations”. According to the National Bank experts, the quoted decrease of formal employment will happen due to closure of private entrepreneurs initiated by the amendments in the tax policy in the first place.
The Chairwoman stressed that the increase in minimum wage will stimulate domestic consumption, herewith, improve economic activity and thus enhance demand for man power and rise employment rate in future.
On top of that, the increase of minimum salary would provide incentives for people, who earlier did not look for a job because of low remuneration.