RELATIONSHIP BETWEEN THE MINIMUM EARNINGS FEE WITH LIVING MINIMUM AND GROWTH DYNAMICS OF GROSS DOMESTIC PRODUCT IN AZERBAIJAN
Abstract
The article contains an analysis of the most pressing issues related to the institution of the minimum wage, the subsistence level and the dynamics of the growth of the gross domestic product in Azerbaijan. The aim of the study was to study how the increase in the minimum wage in Azerbaijan affects economic activity, employment and unemployment. It is important to study this direction because by raising the minimum wage to the subsistence level it is possible to raise wages, reduce poverty and achieve social stability. The relationship between the dynamics of the impact of the growth of the minimum wage and the need to make changes in the labor market due to the risk of expanding the number of poor workers is shown. Based on the studies carried out, it is shown that the level of the minimum wage in relation to the average wage differs significantly, the value of the minimum wage in relation to the average is lower, but there is a tendency to increase. It was revealed that the dynamics of the growth of gross domestic product stimulates the growth rates of the minimum wage, average monthly wage and living wage. From the comparisons, it was revealed that the growth rates of the country's gross domestic product have a significant impact on stimulating economic activity, increasing employment, and changes in the labor market as a whole. At the same time, the importance of state regulation of the minimum wage in a market economy is noted. By the order of the President, the minimum wage has been doubled since 2019 year. Thus, according to the decree dated 18 June 2019 year on the increase of the minimum monthly wage, from 1 September 2019 year, the minimum wage will be 87 USD, which is an increase of 38.8 percent. Although the income of the population in 2019 is lower than forecast, the higher the growth rate of income and wages compared to low inflation, this year has resulted in a real increase in both incomes and average monthly wages. Analysis of statistics for a period of 18 years shows that the minimum wage in Azerbaijan did not affect economic growth. In other words, while the minimum wage in Azerbaijan does not play a role in stimulating economic growth at the macro level, but is only of a social nature.
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