An analytical report by the Institute for Reducing the Shadow Economy and Fiscal Analysis under the Ministry of Economy and Finance proposes gradually increasing the minimum wage in Uzbekistan to 40% of the median wage by 2030. Currently, the minimum wage is 1.271 million soums (about $104), which is lower than in several CIS countries.
The ratio of minimum wage to median wage is 24%, while international practice recommends 40-60%. At the current median wage (5.3 million soums), the minimum wage would need to rise to 2.1 million soums, 1.7 times higher than the current level.
The document notes systemic limitations of the current model: the minimum wage simultaneously serves as a social guarantee and a basis for calculating salaries in the public sector. Its linkage to the Unified Tariff Scale leads to automatic increases in budget expenditures, as public sector labor costs account for 42-45% of total budget spending.
The authors propose abandoning the use of the minimum wage for calculating public sector salaries and introducing an independent base tariff rate. This would break the direct link between social guarantees and budget burden. They also propose introducing regional differentiation of the minimum wage, given the 1.5-2 times difference in average salaries between Tashkent and regions.
As a pilot, the report suggests raising the minimum wage by 30% in construction, retail trade, and public catering, as well as introducing minimum hourly and daily rates. This would cover workers with part-time, temporary, and seasonal employment.
The report notes that informal employment stands at 38-40%, with 15% of workers earning less than 1 million soums and 21% earning near the minimum wage. To improve compliance, digital employment tracking tools should be developed and labor registration procedures simplified.
The proposals are based on international experience and International Labour Organization recommendations, including practices from Germany, Kazakhstan, Japan, and EU countries. However, the authors caution against direct adoption due to differing institutional conditions.
Financier Otabek Bakirov previously stated that raising the minimum wage could help legalize salaries, but many employers still record the minimum wage and pay the rest in cash. The Central Bank noted that real wage growth in Uzbekistan is lower than in the region, but the ratio of annual minimum wage to GDP per capita is higher, indicating more equal income distribution.
Source: www.gazeta.uz