Average wage rises, but purchasing power sharply down

Data published by the Central Statistical Bureau of Latvia (CSB) August 30 show that in the 2nd quarter of 2022 average gross wages and salaries for full-time work in the country amounted to EUR 1 362.

Compared to the 2nd quarter of 2021, the average monthly earnings grew by EUR 105 or 8.3 %. Hourly earnings before taxes increased to EUR 9.20 or by 5.6 %.

Compared to the 1st quarter, in the 2nd quarter of 2022 the average monthly gross wages and salaries grew by 5.0 % and hourly earnings by 5.5 %.

Average net wages and salaries ater tax comprised EUR 997 or 73.2 % of gross earnings. Over the year, net earnings grew slower than gross earnings – by 7.5 %. However, considering recent rapid rises in a wide range of consumer prices, net earnings fell by 7.6 % pointing to sharp decline in the purchasing power of salaried workers.

 

In the 2nd quarter of 2022, median gross wages ( i.e., half of the wages are higher than the median and the other half are lower) and salaries for full-time work amounted to EUR 1 078, while net (after taxes) to EUR 801. Compared to the 2nd quarter of 2021, both gross and net wages and salaries in the country grew by 10.8 %. 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.

In the 2nd quarter of 2022, the average monthly earnings in private sector comprised EUR 1 358, and over the year they have grown faster than in public sector – by 9.0 %. The average wages and salaries in public sector amounted to EUR 1 380, and the increase rate thereof constituted 7.0 %.

Average monthly wages and salaries for full-time work above the national average were recorded in financial and insurance activities (EUR 2 413), information and communication (EUR 2 239), energy sector (EUR 1 765), professional, scientific and technical activities (EUR 1 723), human health and social work activities (EUR 1 621), public administration and defence (EUR 1 556), as well as mining and quarrying (EUR 1 440).

The lowest average gross earnings were observed in accommodation and food service activities (EUR 861).

In the 2nd quarter of 2022, compared to the 2nd quarter of 2021, the sharpest rise in the average earnings before taxes was recorded in Pierīga, the area immediately surrounding the Latvian capital (of 9.0 %) and Vidzeme (8.5 %). The highest average gross earnings for full-time work were observed in Rīga itself (EUR 1 525), whereas the lowest were in Latgale (EUR 947, which is 38 % less than in the capital).

Compared to the other two Baltic states, Latvia is trailing on wages. In the 2nd quarter of 2022, the average gross earnings for full-time work in Lithuania amounted to EUR 1 781, in Estonia to EUR 1 693, and in Latvia to EUR 1 362.

Compared to the 2nd quarter of 2021, the lowest annual increase rate of average earnings was registered in Latvia – 8.3 %, in Estonia it constituted 10.1 % and the highest rate was recorded in Lithuania – 13.7 %.

 

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