Last week was marked with the presidential orders directed toward strengthening social protection of the citizens of Azerbaijan. Amongst them, two orders should be mentioned, which cover wide strata of society. This is an order increasing the minimum wage and base part of the labor pension issued with regards to the age by 25 percent from 1 September. This means that from this month the minimum threshold of the payment of labor and pension will total AZN 75.
Under the conditions of market economy, establishment of the minimum wages is one of the most effective means of the government control on wages and as a whole the stabilization of social and economic situation. In its nature, the minimum wages, approved by state, is characterized as social safeguard and lower boundary of the remuneration for labor. The last one means that no one's labor can be paid below the officially established minimum of the remuneration for labor. At the same time its amount is lower level for determining the wages of the least skilled worker.
Increasing minimal wage is also one of the requirements of the European Social Charter. According to the Charter, the minimal wage in the country confirming it should make 60% of the amount of the average monthly salary. With regards to base pension, according to the requirements of the European Social Charter and convention of the International Labor Organization, it must make up 40% of the amount of average monthly wages. According to the initial accounts, after an increase in the minimum wage and pension in September, the level of minimum labor pension will be 36.5% of the remuneration for labor.
The State Social Protection Fund of Azerbaijan will need AZN 91mln for the additional payments on pensions. Of the gross amount of the additional financing, AZN 18.2mln will be paid in the first month, and remaining AZN 72.8mln will be paid in the next four months. Officially 1.26mln labor pensioners were registered in Azerbaijan. Other 47,770 pensioners are military people, people with special title or state servant, the level of whose pension depends on an increase in the wages.
Improving material situation and social protection of population is a traditional step in the pre-election campaign. Such humanitarian actions of the Government can be expected further because increasing the social payments in the year of elections is one of the components of the pre-elections campaign. And increasing the salaries of the employees of the government-financed organizations and pensions is the most popular step.
Under the present conditions, the role of minimum wage must me to establish minimum not degrading merit of threshold of the remuneration for labor. Employers both from the private and from the government sector must clearly know that there is a threshold lower than which it is impossible to descend.
The intensive work on the development of pension-insurance system will also be carried out in Azerbaijan in the next five years. In particular, within the framework the development of pension-insurance system there are plans bringing the base part of the labor pension to the level of the living minimum. Furthermore, it is planned to develop non-governmental pension institutes and system of voluntary pension provision, social protection of workers and protection of rights on the future pension provision, ensuring direct and valid connection between the paid off and obtained social insurances, the automation of appointment and calculation of the paid benefits.