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Meeting with Chairman of Federation of Independent Trade Unions Mikhail Shmakov

September 13, 2017, Sochi

Vladimir Putin had a working meeting with Chairman of the Federation of Independent Trade Unions Mikhail Shmakov. The discussion focused, in particular, on bringing the minimum wage up to the minimum subsistence level.

President of Russia Vladimir Putin: Mr Shmakov, as you may know, I have been discussing with the Government the matter of bringing the minimum wage in line with the minimum subsistence level.

You are always raising this issue, and quite rightly too, as the law requires bringing these into line.

I would like to begin our meeting with this issue and then move on to any other matters you think we should discuss.

Chairman of the Federation of Independent Trade Unions Mikhail Shmakov: Mr President, we have long been discussing this matter with the Government. The Government formulated a proposal, approved by you, to bring this into effect by the start of 2019. This is a good step forward, but we believe that it could come into effect instantaneously starting on January 1, 2018.

We think this could be done because the statistics show a positive economic development trend and to have this go ahead all at once throughout the country would not require a lot of money – we calculate that around 60 billion rubles would be needed, with around 16–18 billion rubles to be provided from the federal budget.

We could achieve the alignment right at the start of 2018 and all that would remain is to agree or adopt a law on automatic compensation depending on inflation.

The inflation rate is low and stable we do not have such fluctuations now in terms of spending and revenue, and so we can transition to a normal process to ensure the sustainable development of each family, each state and company, all of which is included in the financial plans of companies and the state budget.

Our worst fear is that this may have a negative impact on the budgetary allocations to the wage fund in the public sector. In our opinion, now is the best time in the national economy to do this.

Of course, we have taken note of your instructions to the Government to take a second look at this issue and possibly accelerate its solution.

Vladimir Putin: I only said ‘no later than’.

Mikhail Shmakov: You have set a deadline and urged to speed the matter up. I believe therefore that we can review this matter again, though not today, because the decision has been only taken the other day.

I would like to say again that this is a very good decision, but I think we could deal with the matter sooner than early 2019.

Vladimir Putin: Mr Shmakov, I have a series of international meetings and events in the next two days in Sochi. When I go back to Moscow, I will be able to take this up again. We must tally everything up, but it is true that everyone wants this to happen as soon as possible.

However, as doctors say, we must do no harm; we should not affect the budget’s ability to finance other social obligations, including very important ones.

But you are right in that we have the possibility for doing this now. We discussed this, including a one-time increase of the minimum wage on January 1, 2018. We will get back to this idea.

Mikhail Shmakov: Mr President, I have one more argument.

Various processes are underway in the economy. For example, a leading bank has collapsed. It is planned to invest between 250 billion and 400 billion rubles in its rehabilitation. The 60 billion rubles we need are peanuts compared to 400 or even 250 billion rubles needed for this bank.

Vladimir Putin: This is the job of the Central Bank, not the Government.

Mikhail Shmakov: There must be a mechanism for balancing the spending of both the Central Bank and the Government.

Vladimir Putin: All right, let us talk about this in greater detail.


September 13, 2017, Sochi