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Ceturtdiena 20.06.2019 | Name days: Rasa, Rasma, Maira
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Average wage after taxes in Latvia estimated at EUR 768

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUAt the beginning of 2019, earnings in the country were growing slower than a year before. In Q1 2019, compared to Q1 2018, the average monthly gross wages and salaries grew by 7.8 % or EUR 75, reaching EUR 1 036 for full-time work. The annual increase rate recorded in Q1 2018 constituted 8.7 %, while in other quarters of the year 8.1–8.4 %.

Compared to Q4 2018, gross wages and salaries dropped by 0.6 % in Q1 2019.

It should be noted that minimum wage did not change this year, and, compared to the neighbouring countries Lithuania and Estonia, Latvia had the lowest minimum wage – EUR 430. In 2019, minimum wage in Lithuania grew by EUR 155 or 38.8 % (from EUR 400 to EUR 555), while in Estonia by EUR 40 or 8.0 % (from EUR 500 to EUR 540), according to data compiled by the Central Statistical Bureau of Latvia.

Net wages and salaries constituted EUR 768

In Q1 2019, the average net wages and salaries (calculated based on the labour taxes applicable at workplace) constituted EUR 768. Over the year, net earnings rose by 7.6 %, while compared to Q4 2018 they fell by 0.1 %.

Considering annual consumer price growth of 2.9 %, the real increase in net wages and salaries comprised 4.6 %.

Median wages and salaries comprised EUR 799

In Q1 2019, median gross wages and salaries amounted to EUR 799, and, compared to Q1 2018 (when gross earnings constituted EUR 745), they grew slower than the mean arithmetic wages and salaries (rise of 7.2 %). Net median wages (after taxes) constituted EUR 592 and rose by 7.1 % over the year.

Median is calculated based on the information available in statistical surveys and administrative data of the State Revenue Service.

Median is an average indicator located in the middle of employee earnings sorted in an ascending or descending order. As median, compared to the mean arithmetic earnings, is not influenced by extremely high or low wages and salaries, it reflects typical earnings more precisely.

Sharper rise in earnings recorded in public sector

Over the year, wages and salaries in private sector grew faster than in public sector – by 8.4 % and 6.8 %, respectively. In Q1 2019, monthly average gross earnings in private sector exceeded the indicator registered in public sector by EUR 3 (EUR 1 038 and EUR 1 035, respectively). Average wages and salaries in general government sector, which includes central and local government institutions, as well as enterprises controlled and financed by the central and local government, grew to EUR 985 or by 6.7 %.

Increase exceeding 10 % registered in five economic activities

In Q1 2019, the sharpest rise in earnings was recorded in administrative and support service activities (higher increase in rental and leasing activities, travel agency, tour operator reservation service and related activities, and employment activities) (of 13.0 %), human health and social work activities (higher rise in human health activities) (12.3 %), construction (11.6 %), water supply; sewerage, waste management and remediation activities (higher upturn in water collection, treatment and supply) (11.5 %), and real estate activities (11.2 %).

Changes in the average earnings are influenced not only by the rise of employee remuneration, but also structural changes on the labour market – enterprises that had started and stopped their business during the year, changes in the number of employees and workloads in various economic sectors, as well as state administrative measures in the fight against the shadow economy. The effects caused by the mentioned factors in general may be seen in the changes in the wage and salary fund and number of full-time employees, which are used in the average wage calculations.

Compared to Q1 2018, gross wage and salary fund increased by 9.1 % or EUR 193.0 million, while the number of salaried workers, recalculated into full-time units, grew by 1.2 % or 9.2 thousand in Q1 2019.

Highest earnings in financial and insurance activities and lowest in accommodation and food service activities

In Q1 2019, the highest average wages and salaries for full-time work were registered in financial and insurance activities, information and communication, energy, public administration, professional, scientific and technical activities, as well as mining and quarrying. In other sectors, the average wages and salaries before taxes were below the national average.

The lowest wages and salaries, in turn, were observed in accommodation and food service activities, education, other service activities (that includes activities of public and other organisations, repair of computers and personal and household goods, washing and (dry-)cleaning, hairdressing and other beauty treatment, funeral and related activities), as well as arts, entertainment and recreation.

Lowest earnings still recorded in Latgale

Compared to Q1 2018, in Q1 2019 regional breakdown shows the sharpest rise in the average monthly gross wages and salaries in Kurzeme region (of 9.5 %), followed by Zemgale (9.0 %), and Pierīga (8.4 %). The annual rise in Riga, having the highest wages and salaries (EUR 1 165), was the smallest – 7.2 %. The lowest average gross wages and salaries for full-time work still were observed in Latgale region – EUR 716, constituting 69 % of the national average.


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