The minimum monthly wage in Latvia is set to increase by €40 to €780 in 2026.

As reported, the non-taxable minimum will also rise by €40 next year, from €510 to €550 per month.

The Welfare Ministry noted that last year the share of minimum wage earners was the lowest in five years, declining to 15.3 percent.

According to the Central Statistical Bureau, an average of 117,895 workers, or 15.3 percent of all employees, received the minimum wage or less in 2024. This represents a decrease of 4.1 percentage points compared to three years earlier, when 19.4 percent of workers fell into this category.

In total, 816,545 people were employed in Latvia in 2024.

The Welfare Ministry explains that increasing the minimum wage directly boosts the purchasing power of low-wage earners, positively affecting domestic demand, which is one of the pillars of economic growth. It will also help reduce wage disparities among the Baltic states and bring wages closer to the EU average – one of the tools for reducing emigration.

At the same time, wage growth can serve as a strong incentive to develop competitive advantages beyond low labor costs. It can also encourage innovation and investment in new technologies to reduce costs and improve productivity, the ministry added.

The report also states that the increase would have a positive impact on competition and help reduce the shadow economy in sectors that are more exposed to such risks and have a higher proportion of minimum wage earners.

Finally, the report notes that changes to the minimum monthly wage should not be regarded as an increase in the administrative burden on employers.

Source: BNS

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