From 2025, the minimum monthly wage in Latvia will increase from 700 to 740 euros.
According to Welfare Minister Uldis Augulis, this decision marks a gradual transition to a new system where the minimum wage will be determined as a percentage of the national average wage, which “will certainly improve the financial situation and living standards of low-paid workers.”
Data summarized by the Ministry of Welfare shows that 822,489 residents were employed in Latvia in 2023. According to the Central Statistical Office, in 2023 there were 99,270, or 18.6 percent of workers in the private sector with incomes below or at the minimum wage, and 29,012 workers in the public sector, or 12.6 percent, the Ministry of Welfare said.
Between 2020 and 2023, the proportion of minimum wage and lower wage earners in the public sector increased slightly from 10.4 percent in 2020 to 12.6 percent in 2023, while the proportion of minimum wage earners in the private sector decreased from 21.2 percent to 18.6 percent.
The minimum monthly wage is received by low-skilled workers, while the productivity of such work is reflected, so a significant impact on the competitiveness of the sectoral labor force in the labor market in the long term is not expected, the ministry said.
The ministry also notes that the growth of the minimum wage directly increases the purchasing power of low wage earners, positively affecting domestic demand, which is one of the pillars of economic growth. In addition, the ministry hopes that these changes will contribute to the equalization of wages between the Baltic States, as well as convergence with the average level of wages in the rest of the EU, which is one of the tools to reduce the flow of emigration.
The ministry believes that wage increases can be a serious incentive to create new competitive advantages, as well as promote innovation and investment in new technologies to reduce costs and increase the productivity of production resources, the ministry said.