VILNIUS - Following a 4,000-strong demonstration in Vilnius several weeks ago by the Lithuania's three largest trade unions, the government approved on Dec. 17 an increase in minimum wages starting in 2008.
The government approved raising minimum salary levels from 700 to 800 litas (231.70 euros). Hourly wages will also increase, from 4.19 to 4.85 litas (1.39 euros), as of Jan. 1.
According to data presented by the Department of Statistics, 14 percent of all employees in Lithuania currently earn minimum monthly salary; a lower percentage than in recent years.
Trade union officials said earlier that if agreements with the government weren't made by Jan. 1, they would hold larger demonstrations and possibly organize strikes throughout the country.
Ramune Bielagloviene, project manager at the Lithuanian Labor Federation, told The Baltic Times the salary increase is only one part of what they were able to gain from a long list of demands the unions presented to the government last month. The list also covered social welfare and immigration issues.
"Time is running out â€¦ It is foreseen that in the future we will invite additional discussions with the government," Bielagloviene said.
"We will try to increase the minimum salaries and wages more and more, step by step, and we will also ask what they [the government] can do and what they can't do for us," she said.
Vaidotas Levickis, head of the project department at the Lithuanian Business Employers' Confederation (LVDK), told The Baltic Times it's about time changes were made to boost the economy.
"Increasing wages has been under discussion for a long time in the government. The decision was not done quickly," Levickis said.
"We support a minimum wage increase because we need businesses in Lithuania who can be innovative. If businesses only base themselves on pay, then there is no future for more workers," Levickis said.
At present, LVDK represents small-to-medium sized businesses; it has more than 1,800 enterprises and about 60 associated structures, including Lithuania's Association of Agricultural Companies.
At least one small-sized company director did not support the pay raise.
Aida Vaiciulis, director of Vaiciulis and Partneriai, a consulting firm in Vilnius with six employees, said he worries all wages will have to increase.
"It's not good for business because it'll take away from all the operating costs, and my employees are already making 2,000 litas per month," Vaiciulis said.
Parliament already approved the national budget on Dec. 6 and the budget received final approval with the president's signature on Dec. 13.
After the budget deadline however, the government was still able to add amendments on minimum salaries.
Mantas Nocius, financial advisor to the prime minister, said the increase mainly affects the private sector because only a few workers in state sectors receive minimum salary.
"We approved it in order to reduce the practice of companies paying employees with envelopes [under the table]," he said. "There is flexibility to deal with adjustments in the national budget," he said.
The next budget period goes into effect Jan. 5.