Wage increase in Azerbaijan causes economists' scepticism

The head of Azerbaijan has ordered to increase the minimum (floor) wage in the country by almost 40% starting from March 1 – up to 180 manats instead of 130. Economists are confident that the wage increase will be followed by growth of taxes on entrepreneurs and fines.

According to the president's order, from March 1 on, the minimum (floor) wage will make 180 manats (about 106 US dollars), whereas now it is 130 manats (about 76 US dollars).

"Any increase in wages and pensions should be welcomed. But, unfortunately, even after bringing the monthly minimum salary up to 180 manats in Azerbaijan, it will be equal to the minimum wage for ten hours of work in the United States," Gubad Ibadoglu, the head of the Centre for Economic Studies, told the "Caucasian Knot" correspondent.

Natig Djafarli, the Executive Secretary of the "Republican Alternative" (ReAl) Party, has positively assessed the increase in the floor wage, but also drew attention to the fact that this would increase the tax burden in the private sector of economy.

"Probably, the increase in the floor wage up to 180 manats pursues a purely image goal, as now Azerbaijan is leaving the category of countries with the floor wage below 100 US dollars," Mr Djafarli has noted.