The rouble’s value has dropped like it’s hot as the global economic crisis extended to Russia, and the initial negative coverage has taken an interesting spin.
An article published in the Moscow Times Friday suggested that the ongoing devaluation of the national currency would balance out the over-high salaries of the last few years over the long term.
Basically, during the economic mess before Putin’s administration (you always have to give him at least that much credit) the rollercoastering values of the rouble (though it was still mostly in the low region – it was a kiddie coaster) led many employers to pay wages in foreign currencies. As the rouble stabilized, workplaces gradually switched over, generally giving their employees a fixed rate of 28 roubles on every dollar. The fixed conversion rate meant that employees benefitted as currency values rose, giving some of them de facto raises of 20% or more.
The analysts cited in the article argue that the value swinging in the opposite direction will eventually bring about pay grades that match the level of output by employees.
This is an interesting punctuation in a long series of panic articles on ruble devaluation. It’s as if they’ve been telling people to run around and scream their heads off for the last month, and suddenly stopped, raised their hands in exasperation and said, “Okay guys, chill out.”
Obviously there’s no guarantee that everything’s going to be okay and the rouble will settle firmly into the 28 per dollar ratio. The stance this article takes means that the currency could devalue considerably for an indefinite period of time, and employers can always point to the text and claim its still balancing out. I mean, its not as if they could do something absolutely crazy like automatically correct the pay grades by returning to foreign currency wages (of course, this assumes foreign currencies are stable to strong, which they’re not. But the lack of stability also pokes holes in the corrective wages argument because it takes away the constant in the equation).
The theory essentially places the burden of the economic troubles on employees. Hey, times were good, but now you’re going to take a hit for God knows how long, and then you’ll be getting what you deserve. Which is to say, much less than you were making before.
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