Unions call for better minimum wage deal

The Latvian Association of Free Trade Unions of (LBAS) is urging the establishment of a minimum wage equivalent to 50% of the average monthly wage in the country.

Currently, the minimum monthly wage in the country is 700 euros per month, while the average gross salary last year was 1,537 euros.

In a statement published on its website, LBAS pointed to the European Union's directive on adequate minimum wages, which should also be adopted in Latvia. The unions insists that Latvia must also strictly adhere to the recommendations of the directive, which sets the minimum wage at 50% of the average monthly wage in the country.

Since April 2023, LBAS, together with cooperation and social partners, has been involved in discussions on the principles of reviewing and determining the minimum monthly salary. The Confederation of Latvian Employers is said to have suggested 40%, and the Ministry of Welfare 45%. However, LBAS believes that then Latvia would deviate from the recommendations of the directive and the position of the European Parliament.

It is envisaged that the minimum salary would be calculated from the average monthly salary from the beginning of the year calculated by the Central Statistics Office.

In addition, LBAS encourages raising the non-taxable minimum and relief for a dependent child.

"The non-taxable minimum must rise in such a way that it is beneficial for the average wage, raising the threshold for the application of the non-taxable minimum from at least 1,800 euros to 2,800 euros. These changes would limit the shadow economy, especially 'envelope' wages, and as we know, the shadow economy is closely related to corruption at all levels," LBAS chairman Egils Baldzens said.

The minimum wage differences between the Baltic countries are significant. In gross terms, the minimum wage in Latvia is 700 euros, in Lithuania 924 euros, and in Estonia 820 euros. The calculation of applicable taxes is different in each countries, but even in net terms, Latvia has the lowest minimum wage of the three.

LBAS claims that increasing the minimum wage is necessary because the cost of living has been rising for a long time, which directly affects the well-being of Latvian citizens and the ability to meet both family and personal needs.

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