Economic Analysis: Theory and Practice
 

Minimum wage as a factor of increasing the living standards and life quality

Vol. 16, Iss. 8, AUGUST 2017

Received: 14 July 2017

Received in revised form: 24 July 2017

Accepted: 4 August 2017

Available online: 29 August 2017

Subject Heading: ANALYSIS OF HUMAN CAPITAL

JEL Classification: E21, E24, I31, I32, J31

Pages: 1508–1521

https://doi.org/10.24891/ea.16.8.1508

Zhmachinskii V.I. Volga State University of Water Transport, Nizhny Novgorod, Russian Federation economcaf@vgavt-nn.ru

Cherneva R.I. Volga State University of Water Transport, Nizhny Novgorod, Russian Federation renden@mail.ru

Subject The article addresses minimum wage as a tool for State regulation of life quality and standards of living of the population.
Objectives Our aim is to find solutions to urgent problems in the sphere of remuneration of labor, poverty alleviation and ensuring social stability through establishing a minimum wage at the level of a reasonable subsistence minimum.
Methods The study draws on systems analysis as a scientific method to identify and exploit available opportunities for improving the level and quality of life by fixing the minimum wage.
Results The paper formulates main principles and criteria for establishing the minimum wage as a the basic social State guarantee. It is crucial to establish an objective indicator that reflects the real purchasing power (the consumer budget) and is calculated on the basis of a subsistence level, to create a clear link between the minimum wage and the consumer basket, and to expand the latter, as currently it is extremely small to live a decent life.
Conclusions and Relevance We provide a rationale for a model and type of system for establishing a minimum wage and formulate tasks to regulate it. The paper proves that it is possible to raise the consumer budget and minimum wage, which is linked to it.

Keywords: minimum wage, subsistence wage, living wage, life quality, standards of living

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