During the meeting of the National Council for Trilateral Cooperation on Monday, 31 August, the government and members of Latvian Employers’ Confederation and Free Trade Union Confederation of Latvia reached an agreement that minimum wages in Latvia would rise somewhere between EUR 360 and EUR 370 next year.
On Monday, August 31, partners of the coalition did, in fact, reach an agreement in regard to raising minimum wages in 2016 from the current EUR 360 to EUR 370. The matter of the budget of 2016 and taxes will be discussed in detail by the Cabinet of Ministers.
Previously the coalition could not reach an agreement in regard to next year’s size of minimum wages. Unity offered to raise minimum wages to EUR 380. The National Alliance was prepared to agree with this proposal. The Union of Greens and Farmers, on the other hand, said minimum wages should be kept at EUR 360.
Nevertheless, UGF agreed it would be prepared to support plans to raise minimum wages if the government also suggests a compensation mechanism in relation to institutions that will be affected by these changes, said UGF board member Edgars Tavars. He said that today’s talks of representatives of Latvian Finance Ministry did not provide any clarity to this mechanism. Tavars nonetheless said an agreement on this matter may be achieved further down the line.
Raising minimum wages would cause budget deficit for multiple state institutions. This step would greatly impact healthcare institutions, said UGF’s representative. This is why Unity, as the initiator behind the plan to raise minimum wages, has a responsibility to also offer the compensation mechanism, said the politician.
During the meeting, representatives of Finance Ministry reported on the current situation and proposals that have been voiced during last week’s meetings of the Cabinet of Minister and the Budget and Tax Sub-Committee. During the Monday’s meeting, however, members of the government and social partners failed to reach an agreement on the adoption of differentiated tax-free allowance in 2016, solidarity tax and increase of tax-free minimum, as reported by State Chancellery.
As noted by Prime Minister Laimdota Straujuma, the government will try to do all it can to make sure the budget for 2016 is approved as soon as possible.
Also during the meeting, Education and Science Minister Marite Seile announced the new teachers’ pay system to the government and social partners. This new system is planned to be adopted on 1 September, 2016. Seile said teachers’ pay is not the only factor, although it is one of the most important ones, that shows teachers’ motivation. The new model was conceptually approved by the Prime Minister and social partners. However, according to LBAS and members of the Latvian Education and Science Workers Union, the serious discussions and political decisions are necessary in specific aspects of the matter. During the meeting, participants of the discussion agreed to continue discussions on aforementioned topics.