Analytics, Good for Business, Wages

International Internet Magazine. Baltic States news & analytics Wednesday, 08.12.2021, 14:20

Latvia: Annual increase of average wages and salaries – 5,9 %

Lija Luste Wage Statistics Section, 01.12.2020.Print version
Compared to the 3rd quarter of 2019, in the 3rd quarter of 2020 the average gross wages and salaries for full-time work increased by 5.9% or EUR 64 and comprised EUR 1 147.

In July 2020, compared to July 2019, the average gross monthly wages and salaries increased by 5.7%, reaching EUR 1 174, in August by 5.4% (EUR 1 137), but in September by 6.8% (EUR 1 131).


Compared to the 2nd quarter of 2020, in the 3rd quarter of 2020 gross wages and salaries increased by 2.7%.



Average wages and salaries after taxes – EUR 844

Average net wages and salaries (calculated based on labour taxes applicable on workplace) comprised EUR 844 or 73.5% of the gross salary. During the year, it increased by 6.0%, but compared to the 2nd quarter of 2020 - by 2.4%.



Median wages and salaries comprised EUR 908

The median gross wage in the 3rd quarter of 2020 was EUR 908. Compared to the 3rd quarter of 2019 (EUR 848), it rose more rapidly than the average wages and salaries (7.1%). In the 3rd quarter of this year, net median wages after taxes (net) constituted EUR 685 and rose by 7.5% over the year.


Median is an average indicator located in the middle of employee earnings sorted in an ascending or descending order. As median, compared to the mean arithmetic earnings, is influenced by extremely high or low wages and salaries less, it reflects typical earnings more precisely.


Median is calculated based on the information available in statistical surveys and the State Revenue Service.


In the private sector, annual growth is twice as fast

In the 3rd quarter of 2020, the average gross wages and salaries in private sector amounted to EUR 1.144, and it increased by 7.1% during the year. In the public sector, average gross monthly wages and salaries were EUR 16 higher (EUR 1 160) than in the private sector, but the annual growth rate was twice as slow (3.3%). General government sector, which includes central and local government institutions, as well as enterprises controlled and financed by the central and local government, average wages and salaries increased to EUR 1 125 or by 4.1%.


As compared to the 2nd quarter of 2020, in private sector average gross wages and salaries rose by 3.2%, in public and general government sector – by 1.9%.


Changes of average monthly earnings by sectors
(EUR)

 

3rd quarter of 2019

1st quarter of 2020

2nd quarter of 2020

3rd quarter of 2020

3rd quarter of 2020

Changes, as per cent over

3rd quarter of 2019

2nd quarter of 2020

Total

1 083

1 100

**1 117

1 147

5.9

2.7

private sector

1 068

1 100

1 108

1 144

7.1

3.2

public sector *

1 124

1 104

1 138

1 160

3.3

1.9

general government sector

1 081

1 061

1 105

1 125

4.1

1.9



Average wages and salaries are declining in the transportation and storage, accommodation and food service activities

In the 3rd quarter of 2020, compared to the 3rd quarter of 2019, the average gross monthly wages and salaries decreased in the transportation and storage sector (-1.6%) and in the accommodation and food service activities (-0.3%).


In other sectors, average wages and salaries increased over the year - most in other services (including activities of public, political and other organisations, repair of personal and household goods, dry-cleaning, hairdressing and other beauty treatment, funeral and other services) - by 14.8%, mining industry and quarrying - by 14.1%, in arts, entertainment and recreation - by 10.1%, in professional, scientific and technical services - by 10.0%.


Changes in average wages and salaries are affected not only by increases or decreases in wages and salaries of employees and changes in taxes related to labour income, but also by structural changes in the labour market - start-ups and closures, changes in the number of employees and workloads in various sectors.  The impact of these factors is generally reflected in changes in the wage bill and the number of full-time employees used to calculate average wages.


Due to the COVID-19 crisis, in the 3rd quarter of 2020, compared to the corresponding period last year, the number of full-time employees in the country decreased by 25.4 thousand or 3.3%. The decrease was observed in all sectors, except for information and communication services, education, as well as health and social care, where there was an increase in number of employees.


The wage bill in the country as a whole increased by 2.4%, but its decrease was observed in transportation and storage, accommodation and food service activities, financial and insurance activities, administrative and support service activities, arts, entertainment and recreation, and other services.




A

Agriculture, forestry and fisheries

K

Financial and insurance activities

B

Mining and quarrying

L

Real estate activities

C

Manufacturing

M

Professional, scientific and technical activities

D

Electricity, gas, steam and air conditioning supply

N

Administrative and support service activities

E

Water supply; sewage, waste management and remediation activities

O

Public administration and defence; compulsory social security

F

Construction

P

Education

G

Wholesale and retail trade; repair of motor vehicles and motorcycles

Q

Human health and social work activities

H

Transportation and storage

R

Arts, entertainment and recreation

I

Accommodation and food service activities

S

Other service activities

J

Information and communication

 

 

 



The highest average salary in the financial and insurance sector

In the 3rd quarter of 2020, the average monthly gross wages and salaries for full-time work were higher than the national average (EUR 1 147) in the financial and insurance activities sector (EUR 2 121) information and communication services (1 842), energy (1 455 ), public administration and defence (1 386), professional, scientific and technical services (1 346), mining and quarrying (1 315), health and social work (1 223), construction (1 172) and water supply, sewerage, waste management and remediation activities (1 163).


The lowest average wages and salaries were in accommodation and food service activities (786), education (906) and other services (933).


Average monthly gross earnings by economic activity in Q3 2019 and Q3 2020




Faster wage growth in Pierīga

Among the regions of Latvia, the average monthly gross wages and salaries in the 3rd quarter of 2020, compared to the 3rd quarter of 2019, grew faster in Pieriga (7.4%) and Zemgale (6.6%). The slowest growth of the average wages and salaries was in Kurzeme - 3.8%. In Riga, the average monthly gross wages and salaries in the 3rd quarter of this year were the highest - EUR 1 279 for full-time work, but in Latgale the lowest - EUR 802 (62.7% of the average indicator in Riga).




Lithuania has the highest average gross wages and salaries, and the fastest growth

In the 3rd quarter of 2020, Lithuania had the highest average gross wages and salaries in the Baltic States - EUR 1 455 for full-time work, in Estonia - EUR 1 441, but in Latvia the lowest - EUR 1 147. In Lithuania, as of 1 January 2019, the employer's and employee's state social insurance contribution rates were changed.

Compared to the 3rd quarter of 2019, the average salary in Estonia increased by 3.2%, in Latvia - by 5.9%, but in Lithuania - by 10.4%.

 






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