Analytics, Latvia, Statistics, Wages

Changes in average monthly gross wages and salaries by sector, euros

As of 1 January 2017, the minimum untaxed minimum applied on the workplace was reduced from 75 euros to 60 euros, and minimum national wage rose from 370 euros to 380 euros or by 2.7%.

The sharp increase in consumer prices registered in the 1^st quarter of 2017(of 3.2%, compared to the corresponding period of the previous year) had downward effect on the purchasing power of the employed population – real wages and salaries grew only by 3.1%.

Changes in consumer prices and average wages and salaries compared to the corresponding period of the previous year, %

Compared to the 1^st quarter of 2016, in the 1^st quarter of this year wage and salary rise in public sector was slightly higher than in other sectors (7.3%), increase in private sector constituted 7.2% and that in general government sector 7.5%.

In the 1^st quarter of 2017, the average gross wages and salaries amounted to 881 euros in the private sector and to 897 euros in public sector, whereas in general government sector, which includes central and local government institutions, State Social Insurance Agency, as well as enterprises controlled and financed by the central and local government, the average gross wages and salaries amounted to 847 euros.

Compared to the 1^st quarter of 2016, in the 1^st quarter of 2017 the gross wage and salary fund increased by 8.1% or 146.1 mln euros, whereas the number of salaried workers in the country rose only by 0.9% or 6.4 thousand (recalculated into full-time units).

Compared to the corresponding quarter of the previous year, in the 1^st quarter of 2017 the increase in wages and salaries was recorded in all sectors, except for real estate activities (drop of 1.4%).

The sharpest wage and salary rise was observed in education (10.3 %), mining and quarrying (9.7%), trade (9.2%, with the most notable growth in wholesale and trade and repair of motor vehicles and motorcycles), information and communication (8.6%), agriculture, forestry and fishing (7.7%, with the most significant increase in forestry and logging).

Increase in average wages and salaries in education, mining and quarrying as well as trade was due to the growth in wage and salary fund and decline in the number of full-time employees; in information and communication as well as agriculture, forestry and fishing sector the growth was recorded in both number of employees and wage and salary fund; in real estate activities, in tis turn, the number of full-time employees rose faster than wage and salary fund.

In the 1^st quarter of 2017, the highest wages and salaries were registered in financial and insurance activities, information and communication and energy sectors. Wages and salaries exceeding the national average indicator were also recorded in public administration, mining and quarrying, professional, scientific and technical activities (that include legal and accounting activities, advertising and market research, architectural and engineering activities, management consultancy activities, scientific research and development, etc.), as well as transportation and storage. The lowest wages and salaries, in turn, were observed in accommodation and food service activities, 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), education, real estate activities, arts, entertainment and recreation.

Average monthly gross wages and salaries in Q1 2016 and Q1 2017 and changes thereof

Compared to the 1^st quarter of 2016, in the 1^st quarter of 2017 regional breakdown shows that rise in the average monthly gross wages and salaries in Vidzeme, Zemgale and Pierīga region – of 8.4%, 8.0% and 7.4%, respectively, was faster than that recorded in the country as a whole. Smaller increase was observed in Kurzeme and Latvgale region – of 6.4% and 6.7%, respectively. The annual increase in Riga, where the highest wages and salaries were recorded in the 1^st quarter of this year (1001 euros), constituted 7.1%. The lowest average gross wages and salaries still were registered in Latgale region – 609 euros.

The data on the Baltic states show that in the 1^st quarter of 2017 the highest average gross wages and salaries were observed in Estonia (1153 euros), followed by Latvia (886 euros) and Lithuania (818 euros).  Compared to the 1^st quarter of the last year, wages and salaries have grown in all three Baltic countries. The sharpest rise was recorded in Lithuania (9.3%), followed by Latvia (7.2%) and Estonia (5.7%). At the beginning of the year, only Lithuanian net wage and salary increase exceeded the rise of gross earnings, reaching 79% of the wages and salaries before taxes. In the 1^st quarter of 2017, Estonian average net wages and salaries constituted 81% of the gross earnings, whereas Latvia has the lowest indicator – 73%.

It should be noted that over the year also minimum wage has increased in all three countries: in Estonia from 430 euros in the 1^st quarter of 2016 to 470 euros in the 1^st quarter of this year or by 9,3%, in Lithuania from 350 euros to 380 euros (8.6%), and in Latvia from 370 euros to 380 euros (2.7%).

More information on wages and salaries in Latvia is available in the CSB website section Wages and Salaries – Key Indicators. Data on wages and salaries are published in the database section Wages and Salaries (Short term statistical data and Annual statistical data).

Methodological explanations

The data source used for wage and salary statistics is the sample survey of individual merchants, commercial companies, state and local government institutions, foundations, associations and funds, as well as administrative data sources.

The CSB calculations of average wages in public sector include central and local government institutions and their commercial companies, companies with central or local government capital participation of 50% and over, excluding foundations, associations, funds, and their commercial companies

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

The changes in the average monthly wages and salaries are calculated as not-rounded values, i.e., taking into account the value in euro 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 different workloads.