bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 24.03.2017 | Name days: Kazimirs, Izidors
LatviaLatvia

Unity suggests raising minimum wages more rapidly than UGF

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUUnity plans to offer a plan to raise minimum wages in Latvia much more rapidly than currently proposed by Economy Ministry and Welfare Ministry, which are controlled by Union of Greens and Farmers.

Unity plans to propose raising the minimum wage from EUR 360 to EUR 400. This topic will soon be discussed in the coalition. At the same time, Unity will propose refusing from a suggestion written in the law to reduce PIT by one percentage point, as reported by TV3.

As it is known, Economy Ministry supports raising minimum wages from EUR 360 to EUR 375. Welfare Ministry believes minimum wages should either be raised by EUR 7 or not raised at all, according to the ministry’s informative report on minimum wage size in 2016.

It is mentioned in the report that low labour costs in Latvia remain a competitive advantage. With that, raising minimum wages could create a negative impact on businessmen’s competitiveness. Wage rise would increase labour costs and businessmen’s desire to avoid paying taxes.

The report does mention other factors why raising minimum wages is welcome.

First of all, higher minimum wages would increase residents’ purchasing power, which would have a positive impact on domestic demand and economic growth. Secondly, it would help bring Latvia’s wages closer to the average level in Europe, which is one of the tools to help stop emigration.

Thirdly, increased wages could help stimulate new competitive advantages and help with innovations and investments in new technologies to reduce costs and increase productivity of production resources.

Considering the aforementioned, EM supports the option of increasing minimum wages from EUR 360 to 375 starting with 1 January, 2016. At the same time, the ministry believes it is also necessary to raise the tax free allowance for small wage recipients to maintain their competitiveness.

Finance Ministry believes that in the current situation, when economic growth has become slower and future perspectives are threatened by external risks, including the tense geopolitical situation in the region and recession in Russia, raising labour costs for businessmen would not be economically justified.

In order to maintain Latvia’s external competitiveness, the increase of minimum wages should be carried out in accordance with productivity growth in the national economy, believes Finance Ministry.

The ministry notes that minimum wages had already been increased in the past two years (from EUR 284.57 in 2013 to EUR 360 in 2015). In addition, actual minimum wages, considering inflation, have grown by 25.6%. Productivity, on the other hand, has only grown by 5.6%, mentions Finance Ministry in its report.

FM also points to how a rapid rise of minimum wages can negatively affect the level of employment in the category of labourers who are less qualified. With that, the entire employment level in the country could suffer. According to statistics, the rise of employers in 2014 had become significantly slower. The rise in the private sector has come to a halt. This means that wage rise could potentially threaten the creation of new jobs.

Welfare Ministry believe minimum wages are an instrument to be used to protect low qualified labourers, reduce inequality and maintain general demand. However, its size should be set considering productivity changes and the possible economic situation, which is not considered positive under current geopolitical risks and challenges before Eurozone.

At the same time, Welfare Ministry believes changes to the minimum wage amount should be viewed from the context of change to tax free allowance and PIT.

Welfare Ministry believes that the current minimum wage should either be left the same or increased to EUR 367.

Ref: 102.109.109.6782


Leave a reply

CC: restoration of trust – way out for cartel participants

This year, Competition Council provided positive conclusion in regards to recovery of trust to two companies previously punished for cartel agreement.

Kristovskis: coalition with Lembergs in Ventspils City Council is not possible

«If the party’s list enters the city council, our candidates will definitely not work with Lembergs,» said Girts Valdis Kristovskis in an interview to Latvijas Radio.

Sadales tīkls: energy industry enjoys stable growth in Baltics

Although the company does not experience the lack of quality labour force, when announcing vacancies it becomes clear that population density in regions continues to decline, and this makes it harder to find young specialists for work in regions, said Andis Pinkulis, CEO of Sadales tīkls, in an interview to BNN.

Airline Nordica not to ban tablets and lap-tops from being brought on passenger cabin

Estonia’s national airline Nordica has stated it would not follow the recent U.S. and British ban on such computer devices as tablets and lap-tops from being brought onto passenger cabin on flights.

Rinkevics invites Canadian companies to use Latvia’s transit and logistics infrastructure

«We’re hoping for more intensive economic cooperation and diversification of exports of Latvian goods, as well as attraction of investments from Canada. Canadian investors are awaited in Latvia,» says Latvian Foreign Affairs Minister Edgars Rinkevics.

Rimsevics: tax changes may increase lending volumes in Latvia

Lending volumes in Latvia may increase because of changes to the country’s tax system, says governor of the Bank of Latvia Ilmars Rimsevics.

Latvian authorities deport 19 Vietnamese citizens

19 Vietnamese citizens caught trying to cross the border of the Republic of Latvia last year have been deported from the country.

Latvia’s export and import volume was the lowest in January

Latvia’s export and import volume this January was below what was noted in Lithuania and Estonia. The largest foreign trade balance deficit among Baltic States was noted in Estonia.

Lithuanian population continues to shrink, some glint may be ahead

The shrinkage of Lithuanian population is nowhere close to a halt. In fact, the recent numbers by the Lithuanian Statistics and Eurostat, the European Union‘s statistics agency, purport the opposite: exodus has picked up last year - 50,000 Lithuanian citizens left the country for a better life abroad, up from 44,500 in the previous year.

Over 200 people could have died in Mediterranean

It is assumed that over 200 migrants might have drowned this week in the Mediterranean, off the coast of Libya, a Spanish humanitarian aid organisation feared.

Proportion of HIV-infected tuberculosis patients in Latvia is 17.4% - the highest in EU

The proportion of HIV-infected tuberculosis patients in Latvia is 17.4%, which is the highest not only among Baltic States, but also Europe, as mentioned by Jurijs Perescikovs, director of Disease Prevention and Control Centre’s Infection Risk Analysis Department in a discussion dedicated to the World Tuberculosis Day.

British police names London terrorist

British police has stated that the March 22 terror attack in London was committed by British-born Khalid Masood. Another of his victims has died.

Air temperature in Latvia to remain largely unchanged in coming days

On Friday, 24 March, high atmospheric pressure will remain in the country. Because of that, some clouds will be seen in the sky, wind speed will stay moderate, and air temperature will rise to +3° C…+8° C, as reported by the State Environmental, Geology and Meteorology Centre.

Kucinskis hopes to find a new director for State Chancellery within two weeks

Latvian Prime Minister Maris Kucinskis hopes to find a new manager for the State Chancellery within the next two weeks.

InnoEnergy business opens an office in Latvia

International business accelerator company InnoEnergy has opened an office in Latvia. This objective of this company is preparing new and innovative technologies developers for attraction of investments as part of InnoEnergy accelerator.

Bank of Latvia increases inflation outlook for 2017 to 2.7%

The Bank of Latvia has increased its inflation outlook for 2017 from 1.6% to 2.7%, as reported by the bank’s press-service.

CC permits Lithuanian company to acquire decisive influence over Latvian businesses

Latvia’s Competition Council has permitted two mutually associated deals to be performed by W.P.Carey and Kesko, allowing the two concerns to acquire decisive influence over Lithuanian Baltic Retail Properties and three companies registered in Latvia – K Prof, Polo LS and Daugavkrasts M.

Estonian military transport firm co-operates with leading Norwegian and British companies

Estonian military transport manufacturer Milrem has made a joint product with Norwegian weapon-maker Kongsberg and British remote system producer Qinetiq North America.

Welfare Ministry opposes diverting part of social budget to healthcare

Experts view Finance Ministry’s proposal to divert certain parts of the social budget to pay for certain healthcare services. Welfare Ministry is especially cautious about this proposal.

Saeima agrees to publish names of disciplinary punished judges

Publication of information about disciplinary penalties applied to judges, their names and surnames will no longer be prohibited, as stated by amendments to the Judicial Disciplinary Liability Law supported by the Saeima in the first reading on Thursday, 23 March.

Experts: internet users open up 30% of fraudulent e-mail letters

Cyber criminals are becoming more and more cunning and their fraudulent e-mails – harder and harder to differentiate from real ones. Internet users open up to 30% of fraudulent e-mail letters, explains eScan antivirus developers.

Minister: Latvia supports International Coalition’s fight against Daesh

«The fight of the International Coalition against Daesh has become a very effective instrument to help reduce Daesh military, financial and recruitment capabilities,» said Latvian Foreign Affairs Minister Edgars Rinkevics.

New pulp factory planned in Estonia

Estonian entrepreneurs have envisaged building a high-tech pulp-making plant near the city of Tartu and have submitted the plan for confirmation from Estonian national special planning authorities.

Ventspils Freeport Authority announces procurement

Procurement has been announced for the construction of an access road in Ventspils, Talsu Street 200 and landscaping of nearby territories so that one of the land tenants can commence construction of their building there, as reported by Ventspils Freeport.

Estonian investors consider construction of pulp factory in Latvia

Investors that consider building a pulp factory worth EUR 1 billion in Estonia’s southern region allow for the possibility of getting permission for the same project in Latvia, because this process can take a long time in Estonia.