Pay raise for medics and government price control on food

While Russian troops are gathering on the border trying either by threat or force to return Ukraine to the Soviet past, our Ukrainian Government, from what it looks, has also decided to honor the totalitarian heritage by putting food products under the government price control. Also, after two years since the pandemic has started, the Cabinet decided to give a significant pay raise for medics. 

Pay raise for medics 

Cabinet resolution #2 of January 12, 2022 

Decision-maker: the Cabinet. 

Who is affected: medical workers, the Ministry of Healthcare, the Ministry of Finance, local governments, state and communal medical establishments. 

Background: last year at the official celebration of the Medical workers day President Zelensky promised to increase remuneration for medics in 2022: to ₴13,500 for mid-level health professionals and to ₴20,000 for physicians. 

Summary of the resolution: 

• the Cabinet sets the remuneration for medical workers in 2022: 
  • at least ₴20,000 for full-time physicians (except interns)
  • at least₴13,500 for full-time junior medical staff, medical attendants, and nurses with a master’s degree 

What is right: 

• Cabinet resolution decreases the income disparity between medical workers of state, communal, and private establishments 
• if the Government manages to provide the promised funding, some of the medical workers planning to emigrate will stay in Ukraine. 

What is wrong: 

• guaranteed remuneration for physicians goes against the medical reform. Doctors’ salaries are supposed to be proportional to the number of patients (for family physicians) or services provided (for secondary care) 
• a pay raise should be provided for all employees that get salaries from the government budget or local budgets. A raise for medics only will cause social tension since persons that have not got a raise or got a lesser raise will be dissatisfied 
• there is a risk that ₴185 bln allocated in the government budget will not be enough to provide the increased remuneration. Lack of funding will bring layoffs, back payments, and forceful transition of medical staff to part-time schedule 
• after the previous pay raise for medics funding for healthcare development has decreased from near 7 bln last year to 4 bln this year. 

Alternative solution: 

• pay raise for state and communal sectors has to be proportional to the increase of the national economy and not to the President’s promises 
• medics’ remuneration should be calculated based on the formula approved as a part of the medical reform. 

Government price control on food 

Cabinet resolution #1 of January 12, 2022 

Decision-maker: the Cabinet. 

Who is affected: Ukrainian citizens, agricultural producers, large and small food retail companies. 

Background: in May 2021, the Cabinet updated the resolution introducing the quarantine and imposing anti-pandemic restrictions by adding provisions allowing government price control on several types of products, including fuel. 

Summary of the resolution:  the Cabinet resolution introducing the quarantine and imposing anti-pandemic restrictions is updated with a new list of food products. The markup has to be less than 10% of the wholesale price for the following products: 

• mixed rye-wheat bread 
• long bread 
• buckwheat 

• sugar 
• premium quality wheat flour 
• domestic pasta (noodle products from premium quality wheat flour) 
• scald 2.5% milk 
• sunflower oil 

• category C1 chicken eggs 
• poultry (chicken carcasses) 
• 72.5% butter. 

What is wrong: 

• the state shifts the burden of helping the population under economic pressure on the agricultural producers and food retailers. Such measures are unacceptable in a free market economy 

• government price control on basic food products will result in a deficit of these products since producers are going to reorient themselves to more profitable products. Also, it will lead to the emergence of a black market that will deprive the state of a part of tax revenue 
• high inflation level that affected the welfare of the Ukrainian population stems from causes of both worldwide and domestic scale, not just the pandemic. The government’s intrusion into the workings of businesses is ungrounded and has nothing to do with the pandemic 
• the subject matter of this Cabinet resolution is limited to issues concerning the introduction of the lockdown and restrictions that have to slow down the spread of COVID-19. The resolution cannot address any other issue. 

Alternative solution: 

• stop interfering with market pricing by introducing artificial limits on profits 

• introduce a targeted aid for persons that have lost their income or a large part of their income because of the pandemic