Wages up sharply in first quarter of 2023, purchasing power down

Take note – story published 1 year ago

Data published by the Central Statistical Bureau of Latvia (CSB) May 30 show that in Q1 2023 the average gross wages and salaries for full-time work amounted to EUR 1 462.

Compared to Q1 2022, the average monthly earnings increased by EUR 160 or 12.3 %. Hourly earnings before taxes went up to EUR 9.18 or by 5.2 %.

Compared to Q4 2022, in Q1 2023 average gross earnings increased by 1.3 % and hourly earnings fell by 1.7 %; national wage and salary fund, at the same time, remained unchanged and number of hours worked grew by 1.7 %.

Wages trends in Q1, 2023
Wages trends in Q1, 2023

In January 2023 the national minimum wage was increased from EUR 500 to 620 for full-time work or by 24.0 %, which is partly responsible for the steep rise overall, along with persisitetly high inflation and labor market competition for workers.

Average monthly earnings after taxes EUR 1 071

The average net wages and salaries (calculated based on the labor taxes applicable to employers) comprised EUR 1 071 or 73.2 % of the gross earnings.

However, considering the rise in the consumer prices, net earnings actually fell by 6.1 %, pointing to a decline in the purchasing power of salaried workers for the fourth quarter in a row.

Changes in average net earnings in Q1 2023, compared to Q1 2022, were also caused by the increase in the maximum non-taxable minimum (from EUR 350 to 500 as of 1 July 2022) and a higher coefficient used to calculate the differentiated non-taxable minimum.

Median monthly earnings EUR 1 149

In Q1 2023 median gross wages and salaries for full-time work amounted to EUR 1 149. The indicator has risen by EUR 146 or 14.5 %, compared to Q1 2022 (from EUR 1 003). Net median wages (after taxes) amounted to EUR 856 and have grown by 14.6 % over the year.

The median wage is calculated based on the information available in statistical surveys and administrative data of the State Revenue Service and is an average in the middle of the ascending or descending order of wages of workers, i.e., half of the wages are higher than the median and the other half are lower. As median, compared to the mean arithmetic earnings, is not influenced by extremely high or low wages and salaries, it tends to reflect typical earnings more accurately.

Sharper upturn in private sector

In Q1 2023, the average monthly gross wages and salaries in the private sector amounted to EUR 1 483 and over the year grew faster than in public sector (by 13.1 %). In the public sector, the average monthly gross earnings amounted to EUR 1 422 and grew by 10.5 %.

Change in average monthly earnings by sector


Q1 2022, EUR

Q4 2022, EUR

Q1 2023, EUR

Q1 2023

Change, as % compared to

Q1 2022

Q4 2022


1 301

1 443

1 462



Private sector

1 312

1 441

1 483



Public sector

1 287

1 451

1 422



General govt sector

1 249

1 420

1 366



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