Lithuanian PM says updated forecasts needed for minimum wage decision

  • 2024-05-28
  • BNS/TBT Staff

VILNIUS – Lithuanian Prime Minister Ingrida Simonyte said on Tuesday that updated wage forecasts from the central bank and the Finance Ministry are needed to set next year's minimum monthly wage "as accurately as possible". 

Her comment comes as the Tripartite Council, which brings together representatives from the government, employers and trade unions, is starting discussions on the central bank's proposal to raise the minimum monthly wage by 16 percent to 1,070 euros before tax, from the current 924 euros, as of January 2025. 

According to Simonyte, if employee and employer representatives fail to reach an agreement, the government could make its decision in September.

"We need to get a better sense of this year's projections when they are updated by the Finance Ministry and the Bank of Lithuania, so as to be as accurate as possible in setting next year's minimum wage," the prime minister told reporters in Elektrenai.

"I'd say that the government’s decision on this matter is most likely to be made sometime in September while drafting the budget (for 2025), because this is also important for the budget," she added.  

Simonyte noted that last year, trade unions and employers "probably for the first time" agreed on a minimum wage increase, and the government "only had to give its approval to that agreement". 

"We'll try to find some consensus and agreement. If, as has happened in the past, opinions diverge, then the government will have to set the amount," the prime minister said. 

"We know the ranges we need to aim for. To calculate them correctly, we need the most up-to-date wage data," she added. 

Simonyte noted that previously, employers and employees had differing opinions, with trade unions seeking a faster wage increase and businesses preferring a slower one.

The prime minister said that the minimum wage has been rising "very rapidly" in recent years, alongside the growth of the average wage and the number of employed people. 

She believes that a faster minimum wage increase would not have an adverse impact on the country's labor market, which is expected to remain "very resilient".

"The number of job vacancies remains quite high; there may be slightly more layoffs, but there are also more hires; unemployment has slightly increased, but not significantly," she said.  

Inga Ruginiene, chairwoman of the Lithuanian Confederation of Trade Unions, told BNS on Tuesday that the central bank's proposed 1,070-euro minimum wage should be the "starting point" for talks between businesses and employees.

Emilis Ruzele, acting director of the Lithuanian Business Confederation, said, however, that such a minimum monthly wage would be too much of a burden for businesses, especially in light of discussions on a possible increase in corporate and other taxes for defense purposes.