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Wednesday 25.04.2018 | Name days: Līksma, Bārbala
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Businessmen: rapid increase of minimum wages would increase unemployment

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUWelfare Minister Janis Reirs’ proposals for rapid increase of minimum wages would lead to higher levels of unemployment, higher proportion of the grey economy and further distance Latvia’s residents from welfare, believes Latvian Chamber for Commerce and Industry.

Reirs proposes raising minimum wages by EUR 37, which would weaken the already weak growth of Latvia’s national economy. If the Cabinet of Ministers and the Saeima accept this proposal, it will lead to more unemployment and higher proportion of the grey economy, LCCI believes.

«To improve the welfare of Latvian residents, the government and businessmen have to do everything in their power to increase the average wage level. This will help with people’s return to Latvia. Fewer people will leave the country,» – says LCCI chairman Janis Endzins. «To accomplish that, we need to do everything so that businessmen can justifiably pay larger wages. We need to help with raising exports and productivity. Reirs’ proposal goes the other way – it will directly reduce productivity and exporting power, which would impact certain regions and industries the most.»

LCCI also urges to take into account competitiveness across the entire Baltic region when discussing matters of tax policy. According to the association, Reirs’ proposal will reduce Latvia’s competitiveness in this matter.

«Up until now, Latvia has been spending more money than it has been earning since the restoration of independence. The state debt continues to grow. This slows down the already slow growth of the country’s national economy. In the event of a new crisis, it will put all of us in a very unpleasant situation. It is worth keeping in mind that Reirs’ proposal will set additional expenses not only for businessmen but also the state budget. It will be necessary to increase wages for state and municipal workers,» – Endzins notes, adding that according to estimates of the Bank of Latvia the country’s average minimum wages in comparison with the average wage in the country is one of the highest in the European Union.

Ref: 102.109.109.6872


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  1. Foreigner says:

    Politicians lack understanding. Salary is a product of productivity. The more productive a country is, the bigger salaries. Make less laws/red tape and more personal freedom, and productivity will follow.

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