Minimum wage increase premature

RIGA - Commenting on ombudsman Juris Jansons’ called to increase the minimum wage in Latvia, Prime Minister Valdis Dombrovskis said that Jansons’ mentioned 303 lats (428 euros) as a target amount is not realistic right now, reports LETA.
The government on Feb. 26 accepted a reply from the Welfare Ministry to the ombudsman, where it explains the current economic situation in the country and promises to evaluate possibilities to increase the minimum wage in 2014. “I must admit that this is not a new topic, and we have discussed this matter on several occasions with the ombudsman. We have to balance this matter with what we are capable of,” Dombrovskis told members of the press.

According to him, this call to increase the minimum wage to 303 lats per month is not realistic. He reiterated that the Finance Ministry and the Welfare Ministry are currently evaluating the possibility to increase the minimum wage from next year, and that an agreement has been made that this will be done.

“It is possible to increase the minimum wage by 25 lats, but we have received objections from the Latvian Employers’ Confederation,” Dombrovskis emphasized. He added that a system of gradual increase in the minimum wage must be implemented in the future, balancing this in the interests of social partners, as well as the minimum wage in neighboring countries, so that Latvia does not lose its competitiveness.

Jansons considers the current minimum wage in Latvia “far from being fair,” compared to articles of the Revised European Social Charter, that Latvia plans to ratify, at least in part. “It is more than clear that the government knows what the state-set minimum wage should be. But instead of raising it from 200 to at least 300 lats, the government chooses a ‘wait-and-see, non-solution approach,’” Jansons said through his communications department in February.
The ombudsman has already urged Saeima and the ministries in charge to include the article in the to-be-ratified Charter about a person’s right to fair pay. The government itself has said that the minimum wage should be at least 303 lats.

However, the government adds that Latvia cannot ratify such an article because the Charter states that in order to guarantee a normal standard of living, a salary must be at least 66 percent of the national income per capita, or 68 percent of the national average wage - either 303 lats or 360 lats.