Companies lay off employees

  • 1998-10-29
  • Sandra L. Medearis
RIGA - An additional 10,000 Latvians could find their jobs missing from their daily schedules in the coming months, Minister of Welfare Vladimirs Makarovs told reporters Oct. 19. Forty-six companies have shut down and another 14 are operating only part time.

Employment figures released by the ministry's Central Statistics Bureau show that the Russian economy continues to take deeper bites from revenues of the trade and manufacturing sectors. Jevgenija Novikova, deputy director of the employment department at the Welfare Ministry said Oct. 26, that records show about 92,600 out of work on Oct. 15, compared to 92,906 on Sept. 30, an increase of 3,704 on jobless rolls over a two-week period.

These figures do not include 5,100 employees who are on unexpected vacations without pay from fish canneries, dairy products manufacturers and machine works.

Hard times taking money out of workers' pockets have hit state coffers also by leaving companies reluctant or unable to pay income and social taxes. The State Revenue Service forecasts that this year's budget will be based on 8 million lats ($14.2 million) less than projected.

About 50 companies, mostly involved in fishing, food processing, textile and clothing manufacture, blaming indirect effects from the Russian economy, have asked for payment extensions on 5 million lats due in taxes. The law will allow three months' relief, meaning that the overdue taxes will not be available until next year's budget.

Minister of Welfare Vladimirs Makarovs told Diena that while the state social insurance budget has a reserve created in 1997 and 1998, collections of social tax has fallen this autumn. September receipts are 4 million lats less than revenue received in August. Enterprises have asked for a forbearance on 2.5 million lats of social tax. Additionally, companies have sought delays in paying 1.26 million lats in enterprise revenue tax and personal income tax of 686,000 lats. Eighty enterprises have asked for relief on estimated revenue tax payments due in advance.

Ministry of Finance spokesman Valdis Freidenfelds said that revenue shortfalls for the budget will not create a deficit because revenues to now have exceeded projections.

The unemployment level, at 7.6 percent statewide, is expected to hit 8.6 percent in coming months. Figures from Oct. 1, show significant increases in unemployment figures for Jurmala, Ventspils, Liepaja, and Talsu regions.

Companies dependent on business with Russia have been closing down or laying off workers by the hundreds. Salacgriva '95 fish cannery has announced its decision to close temporarily on Nov. 9. Three hundred of 521 employees are currently on unpaid leave. Lost payments have cost the Latvian fishing industry $6 million, Janis Arnicans, head of the Latvian Fishery Association told Baltic News Service.

Latvian food exports are down 8.7 percent or 5.6 million lats, with machine works and electrical equipment trade falling by 6.8 percent in the first eight months of 1998, the Central Statistics Department reported. The good news is that wood and wood product exports increased 27.1 percent. The export of metal and metal products soared with an increase of 39 percent over the eight months.