Regional aspects of labor remuneration in Russia: Differentiation, indexation, and challenges for the budget sector

Aim. To conduct a comprehensive analysis of the dynamics and structure of wages in Russia and the Donetsk People’s Republic (DPR) in 2017–2025, and to develop substantiated recommendations for improving the remuneration system in the budget sector. Objectives. To examine the dynamics of nominal and real wages in Russia for 2017–2025 in comparison with the subsistence minimum and minimum wage indices in order to assess the effectiveness of the existing mechanisms for indexing household incomes; to identify the key factors and the scale of territorial (interregional) and intersectoral differentiation of remuneration, taking into account the gaps in wage levels between federal districts; to assess the current state of the tariff regulation system in the budget sector of the new constituent entities of Russia (using the DPR as an example) and to identify institutional gaps associated with the absence of a regulatory act governing the procedure for indexing base official salaries; to develop scientifically substantiated proposals and alternative scenarios for recalculating the base values of the tariff scale, as well as to formulate recommendations for synchronizing the labor legislation of the new regions with federal social guarantees in order to eliminate systemic imbalances in remuneration. Methods. The methodological foundation of the work consists of statistical, comparative, and systemic-analytical approaches. To assess the sustainability of the remuneration system in the DPR, the method of scenario forecasting is applied, including the calculation of the base salary of the first tariff grade according to two alternative methodologies, specifically proportional linkage to the minimum wage and indexation taking into account the consumer price index. Results. Significant regional disparities are identified: in the Central Federal District, the average salary exceeds the national level by 27 %, while in the Southern, North Caucasian, Volga, and Siberian districts it remains substantially lower. A growing gap in remuneration is observed between organizations under federal, regional, and non-state forms of ownership. In the new constituent entities of Russia, the distinctive feature of budget sector remuneration is that the salary of the first tariff grade (14,62 thousand RUB, established in 2023) by 2025 covers only 65 % of the minimum wage and 80 % of the subsistence minimum, which makes the actual salary of workers in the initial grades insufficient without additional payments up to the minimum wage. Conclusions. First, the territorial and institutional differentiation of wages in Russia is sustained and deepening in nature, which requires strengthening the equalizing mechanisms of intergovernmental transfers and unifying approaches to regulating remuneration. Second, the absence in the DPR of a regulatory act governing the procedure for indexing wages leads to a devaluation of the real content of salaries and exacerbates the personnel shortage in the budget sector. Third, to eliminate the systemic imbalance in the DPR, it is necessary to adopt a regulatory act on indexation as soon as possible and to revise the base value of the tariff scale. Overall, the study confirms the need to synchronize the labor legislation of the new territories with the Russian system of guarantees and to promptly eliminate institutional gaps that hinder the implementation of citizens’ constitutional right to decent remuneration.