Growth in wages and salaries is slowing down

28.05.2015

Latest data compiled by the Central Statistical Bureau (CSB) show that in the 1st quarter of 2015 the average monthly gross wages and salaries accounted for 785 euros. The average wages and salaries kept increasing; however, growth rate has been slowing down. If in the 1st quarter of 2014 wages and salaries grew by 7.4% annually, then in the 1st quarter of 2015 it increased by 6.1% or 45 euros.

In private sector the average monthly wages and salaries amounted to 773 euros, in public sector – 809 euros, and in general government sector – 757 euros. In private sector wages and salaries rose by 6.9% annually, and in public sector – by 5.0%.

Changes in average monthly gross wages and salaries by sector (euros)

 

Q1

2014

Q4

2014

Q1

2015

Changes, %

Q1 2015 over

Q1 2014

Q1 2015 over

Q4 2014

Total

740

786

785

6.1

-0.1

Private sector

723

755

773

6.9

2.4

Public sector

770

846

809

5.0

-4.5

of which:

 

 

 

 

 

General government sector

713

780

757

6.2

-3.0

The highest gross wages and salaries in the 1st quarter of 2015 were registered in Estonia (1010 euros), while the lowest - in Lithuania (700 euros). As compared to the 1st quarter of 2014 the most rapid growth in wages and salaries was registered in Latvia. In Estonia and Lithuania growth in wages and salaries accounted for 4.5% and 4.3%, respectively.

Salaried employees in Latvia still receive relatively lower net wages and salaries as compared to the neighbouring countries. Average net wages and salaries in Latvia account for 74% of the average gross wages and salaries, while in Lithuania for 78%, and in Estonia - 81%.

In the 1st quarter of 2015 as compared to the 1st quarter of 2014 the average number of salaried employees in the country recalculated into full-time units, grew by 0.3% or 2.5 thsd, while gross wages fund grew by 6.5% or by 103.6 mln euros.

In the 1st quarter of 2015 the average monthly net wages and salaries accounted for 579 euros, and over the year they rose more rapidly than wages and salaries before taxes – by 6.8%. It can be explained with reduction of Personal Income Tax from 24% to 23% as of 1 January 2015. It should be noted that since the beginning of this year also the minimum wage in the country has changed - from EUR 320 to EUR 360 or by 12.5%, which affected changes in the average wages and salaries.

In the 1st quarter of 2015 as compared to the 1st quarter of 2014 the average consumer price level in the country did not change, and thus it did not have any effect on purchasing power of the working population.

At the beginning of this year the largest average wages and salaries were registered in financial and insurance activities sector, information and communication  services, energy sector and public administration. In turn, the lowest average wages and salaries were observed in accommodation, food and other service activities sectors, education, art, entertainment and recreation sectors, trade as well as in real estate activities.

Changes in average monthly gross wages and salaries

Data source: Central Statistical Bureau of Latvia

In the 1st quarter of 2015 as compared to the corresponding period of the previous year the average gross wages and salaries grew in all sectors, except financial and insurance activities sector, which witnessed a slight drop of 0.4%. The most rapid growth was recorded in sectors with labour remuneration below the average level in the country: in accommodation and food services sector - of 10.1%, in administrative and support service activities - of 9.2%, in trade and real estate activities - of 8.4%, in art, entertainment and recreation sector - of 8.1%.

Over the year wages fund both in real estate activities and administrative and support service activities witnessed growth, while the number of employees recalculated in normal (full-time) units decreased. In turn, in the remaining above-mentioned sectors wages fund grew more rapidly than the number of employees.

Over the year drop in the number of employees was also recorded in agriculture, manufacturing, energy and construction sectors.

Data source: sample survey of individual merchants, commercial companies, state and local government institutions, foundations, associations and funds as well as administrative data sources.

More information on wages and salaries in Latvia is available in the CSB database section Wages and Salaries.

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Explanations

Public sector is central and local government institutions and their commercial companies, companies with central or local government capital participation 50% and over, as well as foundations, associations, funds, and their commercial companies. Data on foundations, associations and funds and their commercial activities are not included in the information provided.

According to the European System of Accounts general government sector includes central and local government institutions, social security fund, enterprises controlled and financed by the central and local governments.

Changes of the average monthly wages and salaries are calculated as not-rounded values, i.e., taking into account the value in cents.

When calculating average monthly wages and salaries the number of salaried employees is re-calculated into full-time units, thus eliminating the differences in salaries paid for various workloads.

 

More information:
Lija Luste
Wage Statistics Section
Tel. +371 67366917