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The Problems of Fulfilling Wage’s Functions in Russia’s Economy

Author: Irina A. Kurbatova and Nadezhda P. Permyakova

Abstract:

The article looks at reproducing, stimulating and informational functions of wage. The authors point out a discrepancy between the functional essence of wage and the forms of its manifestation. Current trends in domestic wages and prospects of their regulation are analyzed from the standpoint of the labour pricing theory. The dynamics and the level of wages, the minimum wage in relation to the minimum cost of living in Russia are investigated. The paper highlights a number of factors that hinder adequate fulfillment of wage’s functions. The particularities of state regulation of wages are specified from the viewpoint of wages’ reproductive capabilities. The authors propose measures to correct the instruments of state regulation of wages in the aspect of social and macroeconomic stability, specifically, they suggest introducing the minimum hour wage and augmenting it to the level of the minimum cost of living.

Keywords: wage’s function; average wage; wage differentiation; minimum wage (SMIC); income inequality; minimum cost of living; poverty.