Welfare minister to ask for minimum wage increase, jawbones employers

  • 2005-12-07
  • Staff and wire reports
RIGA - Alarmed by the gradual exodus of working hands from Latvia, Welfare Minister Dagnija Stake said last week that she would ask the government to raise the minimum wage to 100 lats (170 euros) next year.
At the same time she called on employers to increase their payrolls in order to stop the steady outflow of skilled laborers to places such as Ireland.
"It is quite clear now that people are leaving Latvia to earn more money, and at the same time it is also obvious that Latvians, by their mentality, are not inclined to scatter around the world," Stake told Latvijas Radio.

"But if they are offered a salary 10 times more in Ireland, then of course they'll go. At the same time, people have said in public opinion polls that if they were able to earn [in Latvia] three times less than in Ireland they would not go."

Stake therefore made her appeal: "I would like to call on employees to consider very seriously: whether to raise salaries of their local workers or to import labor from neighboring countries."

The minister admitted that the state was unable to exert direct pressure on private businessmen to make them increase salaries, but it could raise the minimum wage. Stake said she would ask the government to raise the wage from 90 lats to 100 lats when discussing amendments to next year's budget.

The government has already agreed to raise the minimum wage from 80 lats to 90 lats from January 2006, which the welfare minister said wasn't enough. She explained that the initial proposal was to increase the minimum wage to 100 lats in January 2006, but the Cabinet decided to only raise it to 90 lats as a compromise with employers.

Latvia has the lowest minimum wage in the EU. It also has the highest percentage of employees who receive the minimum pay.

Latvian society has become increasingly worried over the outflow of working age population to places such as Ireland and Great Britain. According to official data, some 30,000 residents have left the country to look for better paying jobs, though unofficial statistics say the actual number is 50,000 - 100,000.

One result is that businessmen in various industries are having difficulties finding laborers and are considering possibilities to import workers from neighboring countries.

The same trend is being observed in Lithuania and Estonia.

Stake said the free movement of labor in the EU does not allow Latvia to prevent its residents from going abroad and earning more.