Employers against raising minimum wage

The Latvian Employers' Federation said Thursday it is against raising the country's modest minimum wage of €370 per month.

Instead, the Federation favors raising the threshold for non-taxable income.

"The optimum minimum wage level is approximately 40 percent of the average wage. If that level is exceeded, business activity will be impeded. Another problem is that the minimum wage is usually paid to untrained workers whose job involves minimum responsibility and who do less than other workers," the Employers Federation's Director General Liga Mengelsone told the LETA newswire.

If the minimum wage is raised, other wages will also have to increase, Mengelsone added. By keeping their wages screwed down, workers will be motivated to increase their qualifications, take more responsibility and do more, she added.

According to recent statistics, the average wage in Latvia was €854 in March this year. That means that the current minimum wage is at 43.3 percent of the average wage, said Mengelsone, noting that increasing the minimum wage should only be considered when the average wage reaches €925.

In Mengelsone's opinion, the focus should be on attracting major investment. As a result, there will be more high-paid jobs and the average wage would grow faster, she said, employing a version of Reaganite "trickle-down" economics.

The Latvian Chamber of Commerce and Industry's board member Katrina Zarina has also previously said that the minimum wage should only be raised if the economy of Latvia is growing - which it is projected to do by around 2 percent this year.

"The Finance Ministry has reduced gross domestic product growth projections for 2017, therefore it's hard to understand why the Finance Ministry and Welfare Ministry are considering proposing a higher minimum wage," said Zarina.

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Economy
Economy