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The minister indicated that coalition partners agreed on raising the minimum wage to EUR 430 next year and leaving it unchanged for the next three years. In Reizniece-Ozola’s words, this is a good signal to entrepreneurs who will be able to count on an unchanging minimum wage for the next three years.

“Each year, as the government debates raising the minimum wage, entrepreneurs are in uncertainty, but now they will have clear rules of the game for three years,” Reizniece-Ozola said.

The minister also said that there are two sides to the minimum wage increase – the entrepreneurs’ ability to pay this wage to their employees, which might be more difficult in Latvia’s regions, and the wish to ensure higher income for low-paid employees.

“The minimum wage hike is a great burden on entrepreneurs, especially in those enterprises with a high proportion of employees who receive the minimum wage. At the same time, it will be compensated by a reduction of labor taxes,” the finance minister said.

Prime Minister Maris Kucinskis (Greens/Farmers) told journalists after the government meeting that the decision to raise the minimum wage at once and not gradually was taken in order to keep the promise given to the government’s social partners, particularly the Free Trade Union Confederation of Latvia.

“While discussing a faster rise of the minimum wage with social partners we took into consideration the Free Trade Union Confederation of Latvia’s proposal and agreed on a faster increase of the minimum wage already starting in 2018. In this way, we have secured the social partners’ support for the tax reform,” the prime minister said.

Earlier today, Kucinskis said that the government was going to meet with social partners to discuss a gradual raising of the minimum wage – to EUR 410 in 2018 and to EUR 430 in 2019.