Living wage

26.03.2021

Askar Mamin, Prime Minister of the Republic of Kazakhstan, responded to a parliamentary request to increase the living wage (hereinafter referred to as the LW).

"The procedure for determining the subsistence minimum is regulated by the Law of the Republic of Kazakhstan "On Minimum Social Standards and their Guarantees" and the Rules for calculating the living wage. The actual level of LW as a whole in the republic, regions, the capital, cities of republican significance, districts and cities of regional significance on average per capita and by the main gender and age groups is calculated by the statistical bodies,"  the Prime Minister said.

He recalled that the calculation of the LW is based on the cost of the food basket, increased by a fixed share of the cost of the minimum necessary non-food goods and services (set at 45% of the cost of the minimum consumer basket): "According to paragraph 10 of the Rules, when calculating the cost of a food basket, the minimum amount of food consumption and average retail prices for the current month, which already take into account the level of inflation, are taken into account."

It should be noted that according to the results of research conducted in the country with the involvement of international and national experts, the methodology for determining the value of LW used in Kazakhstan is recognized by experts of the International Labor Organization (hereinafter – the ILO) as meeting international requirements.

At the same time, according to the Prime Minister, it is recommended to make some changes to the composition of the food basket and its structure. These measures to improve the methodology for determining LW are implemented in two stages:
  • "First, taking into account the economic opportunities of the country and in the implementation of the Address of the First President of the Republic of Kazakhstan to the people of Kazakhstan dated January 31, 2017 on the need to revise the LW, the structure of the LW has been changed. Thus, the share of the non-food part of the LW has been increased from 40% to 45% since January 2018."
  • "Secondly, in the context of recent changes in the consumption of food by the population and the specifics of the country's food market, taking into account the recommendations of the Kazakh Academy of Nutrition, the issues of expanding the list of food products from 43 to 51 names, increasing the consumption rate of products with a corresponding increase in the daily energy value from 2,175 kcal to 2,330 kcal are being worked out. According to preliminary calculations, this will require an additional allocation of more than KZT 1.1 trln from the republican budget."
The Prime Minister specified that further measures to improve the methodology for determining the LW will be taken as part of the implementation of the National Development Plan of the Republic of Kazakhstan until 2025, which provides for a permanent review of the size and structure of the LW as the basis for calculating all basic social benefits from the state.

In addition, in order to further increase the level of real incomes of the population, several options for increasing the minimum wage (hereinafter - the MW) are being considered): "The first is an increase in the minimum wage by the level of inflation; the second is the establishment of the minimum wage in the amount of 30% of the average monthly salary; the third is the possibility of linking the minimum wage to the median salary," Askar Mamin wrote in his response to the deputy's request.

The Head of the Government said that this year the implementation of a new General Agreement between the Government, the republican associations of employees and the republican associations of employers for 2021-2023 begins, within the framework of which a methodology for establishing the MW will be developed.


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Saved: 06.02.2023




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