Analytics, Direct Speech, Financial Services, Lithuania, Wages

"MMA should be increased adequately to average wage, in order to maintain rational ratio of MMA to average gross monthly earnings, which should not exceed 50%. After this Rubicon is crossed, not only the proportions of unskilled and skilled labour payments are distorted, but also its motivational value is reduced and employers look for ways to restore justice and attempt to pay for skilled labour in non-monetary items or simply regroup flows of shadow labour payment. In the case of the latter, the State gains nothing," said Nauseda in a statement.

According to the economist, in Lithuanian a situation occurs when rise in wage exceeds growth in labour productivity, while unit labour cost is rising. Nauseda says that within a year nominal wages increased by almost 5%, whereas labour productivity, based on the data of the third quarter 2013, increased only by 1.4%. Meanwhile, unemployment rate in Lithuania accounted for 11.4%.

"It would be difficult to find a country in the Western Europe, where unit labour cost is increasing when unemployment rate is so high," said Nauseda.