The Minimum Wage Experiment
Defined, minimum wage is the “lowest remuneration that employers can legally pay their workers”. Here in Ukraine that idea is enforced literally, as one man sets out to see if he can live on bread – or in this case salary, alone.
His name is Klim Bratkovskiy – a blogger and lawyer who has since become quasi-famous for his experiment to live on the official minimum wage in Ukraine for one month. That figure is a measly 3 723 UAH, or $142.76, with the actual net figure after taxes coming out to less than 3 000 UAH. Can he do it?
Some groundwork and general rules needed to be followed in order to truly understand the reality of those “living” on Ukraine minimum wage.
- First, he assumed that he was receiving his salary in an envelope. Here in Ukraine a large part of the economy still lives in the shadow, and many people are paid in cash to avoid taxes. Bratkovskiy based his experiment on having the full 3723 UAH available to him.
- Second, he receives no additional subsidies or income from the government or anyone else
- Third, he owns his own apartment so has no rent consideration
- And finally, his regular allowable expenses include:
- Utility bills
- Internet, which actually helps him in the long-run to find discounts
- Transportation – he calculates 10 UAH/day given that he lives near a Metro
Engaging in this activity for 30 days, Bratkovskiy comes to the conclusion that just as a person with impaired sight has an enhanced ability to smell, so too a person living on minimum wage develops an ability to see and spot discounts and bargains. As an example he says, “One day I saw a sign advertising a free seminar from a lawyer and decided to check it out. The upside – free coffeebreak and snacks.”
This in fact became one of the most significant finds, says the labrat, as any person trying to live under such conditions becomes very conscious of what they eat and where they buy their food. “I would buy one thing in this store, and another thing in another store. I came to realise that somethings are cheaper here, but more expensive there. Living the ‘minimum-wage lifestyle’ creates a minimum-wage mentality’.”
Where places like Pakistan ($158/month) or even Brazil ($290) compare quite closely to Ukraine in terms of the minimum monthly salary, better developed countries are looking a little higher up the pay grade, with paychecks around $1 289 (Austria) and or $1 673 (Belgium). Despite this, Bratkovskiy says it would be possible to live on a minimum wage salary as a healthy middle-aged person, though would become a significant challenge for someone dealing with an illness or the elderly. “If one has to choose between utility payments or food, for example, the choice would be food of course. And explains why there is an acute problem with utility debt Ukraine,” he says. “The same principle applies to medicine.”
At the end of our illuminating exchange, I offer to pay for his coffee. He didn’t refuse. “Habit,” he says, smiling.