Analytics, Financial Services, Latvia, Markets and Companies, Wages

In private sector, there was a greater increase (of 8.3% over the year); in public sector the growth was 5.4%. In private sector, the average monthly wages and salaries amounted to 811 euros, in public sector – 863 euros, and in general government sector – 815 euros.

Changes in average monthly gross wages and salaries by sector (euros)

Compared to the corresponding period of 2014, in the 3rd quarter of 2015 gross wages fund rose by 8.0% or 136.8 mln euros, the number of salaried employees in the country recalculated in full-time units increased by only 0.7% or 5.0 thsd.

In the 3rd quarter of 2015, the average monthly net wages and salaries accounted for 611 euros, and over the year, they rose more rapidly than wages and salaries before taxes – by 8.2%. It can be explained with the reduction of Personal Income Tax from 24% to 23% as of 1 January 2015. Since the beginning of this year also the minimum wage in the country has changed – from 320 euros to 360 euros (increase of 12.5%), which affected changes in the average wages and salaries.

In the 3rd quarter of this year the real increase of net wages and salaries, taking into account the decrease of consumer prices of 0.1%, over the year was 8.3%, thereby increasing purchasing power of the working population.

Changes in consumer prices and average monthly net wages and salaries (% over the corresponding period of the previous year)

Data source: Central Statistical Bureau of Latvia

In the 3rd quarter of 2015, the largest average wages and salaries were registered in financial and insurance activities sector, information and communication services, energy sector and public administration. In turn, the lowest average wages and salaries were observed in accommodation, food and other service activities sectors, education, art, entertainment and recreation sector, trade as well as in administrative and support service activities.

In the 3rd quarter of 2015, as compared to the 3rd quarter of 2014, the average gross wages and salaries rose in all sectors. Over the year the most rapid growth was recorded in sectors with labour remuneration below the average level in the country: in accommodation and food services sector – of 10.6%, in real estate activities – of 10.5%, in construction, arts, entertainment and recreation sector – of 9.3%, in trade – of 9.0%, and in manufacturing – of 8.8%. In accommodation, food, trade, as well as in art, entertainment and recreation sector wages fund grew more rapidly than the number of employees. In the remaining above-mentioned sectors over a year the wages fund witnessed growth, while the number of full time employees decreased.

Changes in average monthly gross wages and salaries

Among the Baltic States, the highest average gross wages and salaries in the 3rd quarter of 2015 were registered in Estonia (1045 euros), while the lowest – in Lithuania (735 euros). As compared to the 3rd quarter of the previous year, growth in wages and salaries was similar in Latvia and Estonia – 7.3% and 6.9%, respectively; in Lithuania wages and salaries grew by 5.5%.

Changes in average gross monthly wages and salaries in the Baltic States (% over the corresponding period of the previous year)

Employees in Latvia still receive the lowest net wages and salaries – the average monthly net wages and salaries in the 3rd quarter of this year accounted for 74% of the calculated gross wages and salaries. In Lithuania this ratio was 77%, and in Estonia – 81%.

Data source: sample survey of individual merchants, commercial companies, state and local government institutions, foundations, associations and funds as well as administrative data sources.

More information on wages and salaries in Latvia is available in the CSB database section Labour Remuneration.

Explanations

*Data of the 1st and 2nd quarter of 2015 have been revised.

In calculations of average wages in public sector the CSB includes central and local government institutions and their commercial companies, companies with central or local government capital participation 50% and over, except foundations, associations, funds, and their commercial companies.

According to the European System of Accounts the general government sector includes central and local government institutions, the social security fund, enterprises controlled and financed by the central and local governments.

Changes of the average monthly wages and salaries are calculated as not-rounded values, i.e., taking into account the value in cents.

When calculating the average monthly wages and salaries the number of salaried employees is re-calculated into full-time units, thus eliminating the differences in salaries paid for various workloads.