Eduard Tumasyan, the president of the Confederation of Armenian Trade Unions, is convinced that the increase in gas prices will be followed by an increase in transportation and food prices.
“The increase in gas prices will surely have an impact on the prices of all kinds of services and goods. Although the Cabinet will discuss the issue of increasing wages and pensions by order of the president in June, I am not sure that in parallel with the increase in prices, the people’s income will increase so much that one will be able to compensate for that in full,” Eduard Tumasyan said during a conversation with Aravot. Mr. Tumasyan is convinced that due to the increase in gas prices, reduction of the population’s purchasing power is unavoidable. “Let me substantiate it with facts. As of July 1, 2012, we had 502 197 retirees, and the average pension was 29 800 drams; we also had 109 488 families who received family benefits and lump sum payments. As for the nominal minimum wage per month, then as of March 2013, it was 145 812 drams. It is not hard to conclude from these numerical data how much the population’s purchasing power will reduce in the short run. Consumption of staples will relatively reduce too. If the energy prices also rise in parallel with the increase in
gas prices, one can realize how hard the condition of employed persons – and not only them – will be as a result of an increase in transportation and food prices following it. Will an employed person be able to overcome all that increase in prices, particularly in the winter months when he will be compelled to spend the lion’s share of his salary on utilities?
“Although the Cabinet is going to discuss the issue of increasing wages and pensions, I think that there will be inflation and reduction of the population’s purchasing power along with that.”
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In response to our observation that it seemed that the increase in gas prices would be a social disaster for both society and state, E. Tumasyan said: “I am sure that the government bodies will take radical measures to ease the burden and not to allow unnecessary tension among society. However, there are still a lot of problems in the social sphere, which will be resolved only by comprehensive examination and serious steps.”
The president of the Confederation of Trade Unions thinks that although it is planned to increase wages and pensions, it is not clear whether the increased wages and pensions will ensure the average standard of living of the resident and an increase in his purchasing power. “In order to realize it, one should calculate what one can buy for 10 000 drams, for example.
“According to Article 182 of the Labor Code of the Republic of Armenia, indexation of wages should be done in accordance with the legislation of the Republic of Armenia; however, indexation restraining inflation, as well as mechanisms of fixing the minimum wage, hasn’t been regulated in the republic so far. By the way, the legislation doesn’t regulate the minimum consumption basket, which can be the basis for fixing the minimum wage, pensions, benefits and other social payments. One of the most exploited subjects is that while fixing the minimum wage, one should take as the basis the articles of Minimum Wage Fixing Convention No. 131 of the International Labor Organization and Article 34 of the Constitution of the Republic of Armenia, according to which ‘everyone has a right to an adequate standard of living for him and his family, including improvement of residence and living conditions.’ However, the steps taken by the Cabinet to observe this article of the Constitution are inefficient.”
ANUSH NERSISYAN
