Report: Latvia has lowest minimal wage

  • 2004-07-15
  • Baltic News Service
RIGA - Latvia has the lowest minimum wage in the EU and also the largest number of employees paid only the minimum wage, according to a survey by the European statistics office Eurostat.

The minimum monthly wage in Latvia is 80 lats (121 euros), while it is 125 euros in Lithuania. Estonia and Slovakia also have rather low minimum wages compared with new EU members - 159 euros and 148 euros respectively.
In addition, Latvia has the largest number of employees who receive the minimum wage only - 15.4 percent of the total workforce. Luxembourg comes next in this category with 15.1 percent workers earning the minimum wage, while in France minimum-wage employees make up 14 percent of the workforce.
Economists attribute Latvia's dismal record in this category to unofficial wages - or the gray economy, a practice quite widespread in the Baltic countries. Employees are officially paid the minimum wage, but they receive another chunk of their salary on the side so as to avoid social and income taxes.
Eurostat figures show that the minimum wage in Latvia makes up some 35 percent of the average wage in the manufacturing and services industry, though these calculations were done based on 2002 data.
The Latvian government has agreed to work toward a gradual raise of the minimum monthly wage, which should reach 140 lats in 2010.
Luxembourg boasts the highest minimum wage in the EU at 1,403 euros. In the Netherlands and Belgium that wage is 1,265 euros and 1,186 euros respectively.