RIGA - In 2014, average hourly labour costs in Latvia were estimated to be 6.6 euros, which is the fourth-lowest indicator in the European Union (EU), according to the latest data from Eurostat. The data exclude agriculture and public administration.
The low wage costs are on the one hand a tempting incentive for international businesses to head to the Baltic region in search of low costs in the form of cheap labour combined with decent levels of expertise. But on the other hand, the results reflect Latvia’s ongoing difficulties to boost the wealth of its own citizens and to boost consumer spending.
However, Latvian labour costs was not the lowest in Europe. The lowest hourly labour costs were recorded in Bulgaria (3.8 euros an hour), Romania (4.6 euros) and Lithuania (6.5 euros).
Yet Latvia’s Baltic neighbor Estonia’s average hourly labor costs have reached 9.8 euros, which is the tenth-lowest indicator in the EU, six places higher than Latvia. By comparison, the highest hourly labor costs were registered in Denmark (40.3 euros an hour), Belgium (39.1 euros), Sweden (37.4 euros), and Luxembourg (35.9 euros) — signs of how much further the Baltics still have to go to match their western European counterparts in terms of quality of life.
In 2014, meanwhile, the average hourly labor costs in the EU were estimated to be 24.6 euros across the EU, and 29.2 euros in the euro area.
On the bright side, the results mark a trend that is positive for Latvia. Compared with 2013, average hourly labor costs in Latvia have increased 6 percent since 2014, which is the second fastest growth in the euro area.
Meanwhile, Estonia registered a 6.6 percent increase, while Lithuania registered an increase of 3.5 percent.
The data applies to enterprises with ten or more employees.