bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Friday 20.07.2018 | Name days: Ramona, Ritma
LithuaniaLithuania

Lithuanian employers bristle against minimum wage raise to 450 euro

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU

Linas Jegelevičius for the BNN

The disparities of the socio-economic development of the regions are very high in Lithuania, so raising the minimum wage from 400 euros now to 450 euros as suggested by the Lithuanian Government would cripple many small and medium-sized business owners in the less prosperous regions and the municipalities, Lithuanian economists caution. The minimum wage was raised in Lithuania by 20 per cent to 400 euros last year.

«The idea of raising minimum wage is good and many local employers would have no other choice than to comply with the decision. Moreover, the raise would encourage them to invest into the modernisation of their technologies. However, for the local service sector as well as many small business owners, the raise would be unbearable,» Giedrė Sugintienė, head of the Businessmen Association of the Tauragė County, told BNN.

«Government should set different levels of minimum wage in every region according their actual economic situation. It is unfair to put the Vilnius region and the far-flung Kretinga district in the same basket due to the huge differences in the potential and the growth,» Danutė Rubavičienė, head of the Small Vendor and Businessmen Association of the Kretinga district, told BNN. «For the majority here, the raise would be disastrous,» she added.

Lithuania’s Tripartite Council, representing the Government, part of employers and trade unions, continued this week negotiations on the raise of minimum wage.

With the trade unionists seeing it at 450 euro from 2019, employers meanwhile caution that, if enacted, the legislation would take a heavy toll on small and medium-sized employers in the provinces.

Likewise the Kretinga employer representative, Danas Arlauskas, head of the Lithuanian Confederation of Employers, argues that raising the minimum wage should be pegged to a different average salary in the regions.

In his words, if the minimum wage was raised to 420 euros, the different between the minimum and average wage would stand at around 65 per cent in around 15 municipalities.

«Who will assume responsibility for the worsening of business environment?» he asked rhetorically.

Meanwhile, Robertas Dargis, president of the Lithuanian Confederation of Industrialists, told BNS Lithuania raising the minimum wage would be a blow to service companies in the regions.

«The minimum wage is an important phenomenon in the regions, especially in the service sector, where livelihood is not very high. Raising the minimum wage would be a blow to such companies. The minimum wage is not that popular at industrial enterprises as a large part of those enterprises use robots, are introducing digital technologies and they need a qualified workforce,» he said.

Gražina Gruzdienė, chair of the Trade Union of Lithuanian Food Producers, says that trade unions see all possibilities to raise the minimum wage to 450 euros early next year.

Lithuanian PM says minimum wage hike is a matter of negotiation and does not say by how much it could be raised in early 2019.

«The Tripartite Council will now sit down for talks and we’ll listen to what expectations the trade unions and employers have… The government, as an active member of the Tripartite Council, will stick to the principle…that the minimum monthly wage should be between 42 and 48 percent of the average wage,» Skvernelis said on Monday, June 11.

After the Seimas approves the proposed tax reform, which provides, among other things, for merging employee and employer social insurance contributions, the formula for the ratio between the minimum and average wage be adjusted as well, PM added.

This time, the minimum wage is expected to be set based on a formula, but some employers want it to be improved.

The Tripartite Council decided last year that the minimum wage should account for 45-50 per cent of the average wage. The minimum wage was last year raised by 20 euros to 400 euros.

Earlier the year, the Bank of Lithuania has proposed to raise the minimum wage by 20 euros to 420 euros so that it makes 47.3 per cent of the average monthly salary, a proposal that received support of the Government and employers.

According to the Labour Code that went into force in the middle of the last year, the minimum wage can be paid for unqualified work only.

The International Monetary Fund (IMF) has also called on Lithuania to approach further minimum wage increases with caution and to maintain a moderate ratio of the minimum wage to the average salary.

Borja Gracia, head of the IMF European Department’s mission that completed its work in Vilnius last month noted that Lithuania’s minimum wage had been rising at a fast rate in recent years.

«Minimum wages have been increasing rapidly since 2013 until 2016. For example, if you look at minimum wages relative to average wages, they were around 40 per cent more than ten years before 2013 and then in a few years they increased to 50 per cent. In our assessment, we do not see the increase to 50 per cent as providing enough gains to justify such a high level relative to the average wage,» he was quoted as saying.

Gracia underlined that the IMF did not propose that Lithuania cut the minimum wage.

«We are not proposing to reduce the minimum wage, but we are proposing to gradually get the ratio of the minimum wage to the average wage closer to what used to be level in Lithuania prior to 2013,» the IMF expert said.

«We don’t see any negative overall impact (on the economy), but we think that for particular groups, in rural areas, where wages are lower because productivity is lower (…), the impact can be negative and that’s our concern,» he added.

In the first quarter of 2018, it was Lithuania that reported the steepest year-on-year growth of the average gross monthly wage among the three Baltic states, according to Latvian Central Statistics Bureau (CSB).

In the first quarter of this year, the average gross monthly wage in Latvia grew by 8.6 per cent from the same quarter in 2017, while the gross wage in Lithuania rose 9.5 per cent, and the gross wage in Estonia climbed 7.7 per cent.

The highest gross monthly wage in the first quarter of 2018 was recorded in Estonia where employees received 1,242 euro on average. Latvia was second with 960 euro gross monthly wage and Lithuania was in third place with 895 euro.

The minimum wage went up in all three Baltic states early this year. In Lithuania it was raised by 5.3 per cent to 400 euro, in Latvia by 13.2 per cent to 430 euro, and in Estonia by 6.4 per cent to 500 euro.

The average gross monthly salary in Lithuania’s economy, excluding sole proprietorships, stood at 884.8 euros in the fourth quarter of 2017, according to figures from the country’s statistics office.


Leave a reply

  1. worker says:

    Maybe if they can’t afford to pay peanuts that €450 really is, their business is crap and labour market would be better off without them?

Estonians buy alcohol in Latvia; country loses EUR 20 million in six months

Latvian stores located close to the Latvian-Estonian border have sold 1.6 million litres of strong alcoholic drinks in the first half year of 2019. This means Estonia has lost more than EUR 20 million in taxes, according to data from Association of Estonian Alcohol Producers and Importers.

Lithuania’s Election watchdog slams ruling LFGU over popular TV series

Political messages can be channeled in various ways and the ruling now Lithuanian party, LFGU has chosen a very delicate way of the communications – through a TV series featuring the beauty and the ambiance of Naisiai, a picturesque settlement in Siauliai district.

Association: around 3,3000 people know of their HIV infection but receive no treatment

HIV remains a serious problem in Latvia – around 3,300 people are aware of their status but receive no treatment and continue spreading the infection. Because of that, it is necessary to act quickly for Latvia to lose its status as HIV kingdom and limit the spread of the infection, says Baltic HIV Association, informing decision-makers and responsible officials in institutions and hospitals about the HIV/AIDS situation.

Driver shortage may force reduction of international road haulage volumes

Latvia’s road haulage companies have started experiencing shortage of drivers. On top of that, if employment conditions for residents of non-EU member states do not change, it may be necessary to reduce the volume of road haulage volumes, says Latvijas auto president Valdis Trēziņš.

Lattelecom’s turnover up 9% in first half-year of 2018

Lattelecom Group’s turnover reached EUR 98.7 million in the first half-year of 2018, growing by 9% in comparison with the same period of 2017, according to unaudited financial results.

1,140 fewer births registered in Latvia in 2017

Since 2016 the number of births in Latvia is declining again. Compared to 2016, a total of 1,140 births fewer were registered in 2017. Also, the provisional number of births registered over the first six months of 2018 (9,664 children) is by 664 children smaller than that registered over the respective period of 2017.

Citadele Bank decides to reform Lithuanian subsidiary as a branch office

Citadele Bank has decided to reform its Lithuanian subsidiary as a branch office, as confirmed in the statement the bank submitted to Nasdaq Riga.

Russian pension age hike discussed amid protest outside Duma

As the Russian paliament votes on the proposal to gradually increase he pension age to 65 for men and 63 for women, some 200 people were seen protesting against the reform in Moscow.

Corruption watchdog chief says bureau has done no illegal actions

After going through Corruption Prevention and Combating Bureau’s past investigative activities, the bureau’s chief – Jēkabs Straume – found it confusing that officers often took no appropriate actions after acquiring evidence or receiving indications regarding necessary steps.

Illegal border crossings to Estonia on rise after Russia World Cup

Football fans with temporary residency permits of the Russia World Cup, or fan Ids, are trying to illegally cross the Russian border with Estonia, a member of the European Union.

Estonian 13-year-old lethally overdoses fentanyl

Estonian prosecutors have accused a 15-year old of negligent homicide after a girl, 13, passed away from fentanyl overdose.

Wild party competition and political chaos – what goes on during pre-election period?

If we compare who fought under 5% barrier some 8-12 years ago, we will see Daugava’s diggers, head nurse parties and eurosceptics parties whose ability to create some form of a working party programme was very weak. Now political parties’ competitiveness is so high that up to eight parties may successfully overcome the 5% barrier and this points to healthy competition. At the same time, in all this competitive mess it is impossible to understand where parties get financing and access to media resources, politologist and Providus think tank head researcher Iveta Kažoka commented on the pre-election period in an interview to BNN.

Google fined with EUR 4 billion for competition abuse with Android

Google has been fined by the European Commission with a fine of 4.34 billion euros illegal abuse of its dominant market position and the executive of the European Union is set to move on with investigations into other possible practices of unfair competition by the U.S. company.

Turkey removes post-coup attempt state of emergency

The government of Turkey has decided to end the nationwide state of emergency that was imposed in 2016 after a failed coup attempt, state media have reported.

House arrest of Russian theatre director Serebrennikov extended

A court in Russia prolonged the house arrest of Kirill Serebrennikov, a leading Russian theatre and cinema director, until August 22 as he waits for a criminal trial charged with of embezzlement of state funds.

NCP picks Jurašs, Strīķe, Bordāns, Feldmanis and Šuplinska as its headliners

Latvia’s New Conservative Party has picked Juris Jurašs, Juta Strīķe, Jānis Bordāns, Krišjānis Feldmanis and Ilga Šuplinska as its headliner candidates for Saeima elections.

Bank: residents spend an average of 50 to 100 euros on health every quarter

84% of residents aged 18 to 74 have used medical services in the past three months. Only 5% of all costs were covered by health insurance, according to a survey by Norvik Banka.

Countries sign third Rail Baltica co-financing agreement

Connecting Europe Facility co-financing agreement for the construction of Rail Baltica railway infrastructure was signed by participating member states on 13 July. The value of the agreement is EUR 130 million. CEF’s contribution will reach EUR 110 million, which is equal to 85% of all applicable costs, as confirmed by RB Rail communication consultant Ligita Brodiņa.

Saeima plans to increase compensations for child victims

Saeima’s Legal Affairs Committee supported for the third reading amendments that provide for increasing state compensations to child victims.

Sweden asks for help to fight wildfires behind Arctic Circle

Sweden has called for help of European Union neighbours to put out wildfires, some raging in territories behind the arctic circle.

Latvijas Krajbanka administrator recovered EUR 1,038 million in June

The administrator of the liquidated Latvijas Krajbanka recovered EUR 1,038 million in June, which is 6.9 times more than a month prior, according to the official outlook published in Latvian Herald.

Estonians warned of heat wave, high UV radiation

Weather forecasters in Estonia have warned the population of hot weather conditions, because temperatures are forecast to reach 30-31 degrees Celsius this week.

Minister says police have leads in Bunkus murder case

Police have found new leads in the murder case of former insolvency administrator Mārtiņš Bunkus, said Interior Affairs Minister Rihards Kozlovskis in an interview to 900 seconds programme of LNT.

Average EU market prices for dairy products grew in May

Compared to April, dairy product prices in Latvia did not increase in May. In the EU, however, average market prices continued growing in May, according to information compiled by Agriculture Ministry’s Market and Direct Support Department.

ECHR: Russia violated human rights in Pussy Riot and Politkovskaya cases

The European Court of Human Rights (ECHR) has found Russia guilty of human rights violations in its handling of two high-profile cases – its arrest and conviction of Pussy Riot protest group in 2012 and the investigation into journalist Anna Politkovskaya's murder.