RIGA – In the fourth quarter of 2018 hourly labor costs in Latvia rose by EUR 1.05 or 13.1 percent, reaching EUR 9.06, according to seasonally non-adjusted data, the Central Statistical Bureau reported.
Seasonally adjusted data show a smaller increase – 11.9 percent.
Compared to the fourth quarter of 2017, seasonally non-adjusted data on the fourth quarter of 2018 show that hourly labor costs increased in all economic activities except for energy sector. The sharpest growth was recorded in other service activities (activities of public, political and other organiations, repair of computers and personal and household goods, washing and (dry-)cleaning, hairdressing and other beauty treatment, funeral and related activities) (of 33.5 percent), human health and social work activities (24.7 percent), real estate activities (17.8 percent), administrative and support service activities (16.8 percent), accommodation and food service activities (16.5 percent), transportation and storage (14.1 percent), as well as education (13.9 percent).
Hourly labor costs are influenced not only by changes in wages, salaries and other labor costs, but also by the fluctuations in the number of working days, hours worked and employees over the year.
In the sectors indicating sharper hourly labor cost rise over the year, greater influence was exerted by the drop in the number of hours worked as well as increase in regular wages and salaries, employers’ voluntary social security contributions (additional pension insurance contributions, health and life insurance contributions, etc.) and benefits paid. It should be noted that in 2018 changes in the costs paid by an employer were influenced also by the rise in minimum wage and introduction of compulsory health insurance.
The smallest increase in hourly labor costs was recorded in financial and insurance activities (of 6.3 percent) where the highest labor costs are observed. Hourly labor costs in energy sector, along with the decline in compensations paid to the employees dismissed over the year and social contributions, fell by 3.8 percent.
In the fourth quarter of 2018, the highest hourly labor costs were registered in financial and insurance activities (EUR 17.4), information and communication (EUR 14.6), public administration and defense (EUR 11.67), energy sector (EUR 11.41), as well as mining and quarrying (EUR 11.17). In its turn, the lowest hourly labor costs were recorded in in accommodation and food service activities (EUR 6.41), other service activities (EUR 7.19), arts, entertainment and recreation (EUR 7.43), education (EUR 7.53), and real estate activities (EUR 7.7).