Latvia is raising the minimum monthly wage from EUR 700 to EUR 740 as of January 1, 2025.
The Ministry for Welfare says that the rules apply to all employers and employees. Welfare Minister Uldis Augulis says that this marks a gradual transition to a new system under which the minimum wage will be set as a percentage of the national average wage. “This,” says the minister, “will definitely improve the material situation and living standards of lower-paid workers.”
According to data which the ministry has compiled, 822,489 people in Latvia were employed last year. The Central Statistical Bureau has determined that of the 131,584 people who were working for the private sector, 99,270 (18.6%) earned a wage up to the minimum wage. In public sector, there were 29,012 workers with such a wage level (12.6%), the ministry said.
The share of people who earn the minimum wage or less in the public sector increased a bit between 2020 and 2023, from 10.4% in the earlier year to 12.6% in the latter one. In the private sector, the share of minimum wage earners declined from 21.2% to 18.6%.
There are certain sectors in the Latvian economy in which a large share of workers are paid the minimum wage or close to it. This can be down to production cost pressures such as the need to modernise technological processes so as to increase productivity.
The Welfare Ministry adds that a higher minimum wage will have a direct impact on purchasing power among low wage earners, thus ensuring a positive effect on domestic demand, which is one of the pillars for economic growth. The ministry also hopes that the changes will help to level out wages among the Baltic States, as well as to bring them closer to the rest of the EU. This, says the ministry, is a means for reducing emigration flows from Latvia.
Source: BNS
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