CRISIS OF THE INCOMES POLICY IN UKRAINE

Abstract

The orientation of the incomes policy mainly to the support of vulnerable strata of the population and the neglect of a justice in the payment for labor and the relations between wages and social transfers provoke the economic passivity. The necessity to pay for the services that are financed from the budget provokes the nonpayment of taxes, and the too small pensions lead to the nonpayment of insurance contributions. The illegal economic activity is perceived almost as a norm.
The economic consequences of errors are as follows: expansion of the shadow employment; excessive unjust inequality that is unacceptable for many persons; large-scale poverty; economic passivity; distorted structure of population’s expenses; overloading of the budget by social transfers, and, hence, impossibility of the required financing of education, medicine, social services, and provision of all amenities; and absence of sufficient accumulations, which results in the absence of investment resources and funds for the softening of social consequences of a restructurization of the economy.
The social consequences are complicated and not obvious, but are extremely important: the total discontent by the power, which creates the foundation for large-scale social protests; inclination to get additional incomes for the provision of services, which are free of charge by law or whose cost is low; expansion of the corruption in spheres, where it was not present; social acceptance of the shadow activity; social nihilism.
We need the reorientation from the help to needy citizens to the stimulation of a growth of the payment for labor: the essential change of the taxation system; monetization of a part of benefits and supports and cancellation of the rest ones; change in the mechanism of determination of the value of public services and their payment; orientation of tariffs on the compensation of expenditures and on the economizing of the consumption; determination and holding of the relations between the main social standards and guarantees; differentiation of social transfers for the activation of the economic behavior of the able-bodied population; and control over the expenditures and the level of consumption for the elimination of nonregistered incomes.
The effect will not fast. The cardinal changes will induce the powerful counteraction. But the neglect of risks threatens by social conflicts.