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Official statistics of Latvia
Official Statistics Portal of Latvia
Press release

Lower earnings growth rate recorded in the 1st quarter

Data of the Central Statistical Bureau of Latvia (CSB) show that in the 1st quarter of 2022 the average gross wages and salaries for full-time work in the country amounted to EUR 1 297. Compared to the 1st quarter of 2021, the average monthly earnings grew by EUR 84 or 6.9 % thus coming nearer the annual increase rate recorded before the pandemic (7.2 % in 2019). Hourly earnings before taxes increased to EUR 8.72 or by 9.6 %.

Compared to the 4th quarter of 2021, in the 1st quarter of 2022 average monthly gross wages and salaries dropped by 2.9 % and hourly earnings by 1.7 %.

In 2022, the national minimum wage remained at the same level it was the year before – EUR 500 for full-time work, however as of 1 January 2022 the maximum non-taxable minimum increased and income thresholds subjected to different income tax rates changed thus affecting the average earnings after taxes (net).

Average monthly earnings after taxes EUR 951

Average net wages and salaries (calculated based on the labour taxes applicable on workplace) comprised EUR 951 or 73.3 % of gross wages and salaries. Over the year, net earnings grew slower than gross earnings – by 6.2 %. However, considering rise in the consumer prices, net earnings fell by 2.7 % pointing to reduced purchasing power of salaried workers.

Median monthly earnings – EUR 1 000

In the 1st quarter of 2022, median gross wages and salaries for full-time work amounted to EUR 1 000. Compared to the 1st quarter of 2021 (EUR 947), they rose by EUR 53 or 5.6 %. In the 1st quarter of the year, median net wages and salaries (after taxes) comprised EUR 743 and rose by 5.1 % over the year.

Median is calculated based on the information available in statistical surveys and administrative data of the State Revenue Service.

The median is the average in the middle of the ascending or descending order of wages of the workers, i.e., half of the wages are higher than the median and the other half are lower. As median, compared to the mean arithmetic earnings, is not influenced by extremely high or low wages and salaries, it reflects typical earnings more precisely.

Sharper annual upturn in private sector

In the 1st quarter of 2022, the average monthly earnings in private sector comprised EUR 1 306, and over the year they have grown faster than in public sector – by 7.2 %. Average wages and salaries in public sector amounted to EUR 1 285 and the increase rate thereof constituted 6.1 %. Average earnings in general government sector, which includes central and local government institutions, as well as enterprises controlled and financed by the central and local government, grew to EUR 1 246 or by 5.6 %.

Compared to the 4th quarter of 2021, average wages and salaries in public sector fell by 7.2 %, of which by 8.7 % in general government sector. Drop recorded in the private sector was notably smaller – 0.9 %.

Change in average monthly earnings by sector

 

Q1 2021, EUR

Q4 2021, EUR

Q1 2022, EUR

Q1 2022

Change (%), compared to

Q1 2021

Q4 2021

Total

1 213

1 336

1 297

6.9

-2.9

private sector

1 218

1 318

1 306

7.2

-0.9

public sector*

1 211

1 384

1 285

6.1

-7.2

general government sector

1 180

1 364

1 246

5.6

-8.7

* Excluding foundations, associations, funds and their commercial companies.

Change in the average wages and salaries is influenced not only by the rise or decline of employee remuneration, but also structural changes of the labour market – enterprises that have started and stopped their business during the year, changes in the number of employees and workloads that were affected by government restrictions imposed and support measures taken due to the COVID-19 pandemic.

The effects caused by the mentioned factors in general may be seen in the changes in the wage and salary fund and number of full-time employees, which are used in the average wage calculations.

In the 1st quarter of 2022, compared to the 1st quarter of the previous year, the total wage and salary fund increased by 13.0 % or EUR 320.8 million, while the number of salaried workers, recalculated into full-time units, grew by 38.6 thousand people or 5.7 %.  

Over the year, the sharpest rise of earnings was registered in professional, scientific and technical activities, water supply, sewerage, waste management, and remediation activities, arts, entertainment and recreation, accommodation and food service activities, energy sector, as well as financial and insurance activities.

In arts, entertainment and recreation, accommodation and food service activities, as well as financial and insurance activities wage and salary fund grew faster than number of employees, while in other above activities growth in the fund was observed, but number of employees reduced.

Decline in the average wages and salaries was recorded in other service activities (of 2.6 %), which was due to steeper rise in full-time employee number than in wage and salary fund.

Highest-paying economic activity ranking remains unchanged

In the 1st quarter of 2022, the average monthly wages and salaries for full-time work above the national average were recorded in financial and insurance activities (EUR 2 574), information and communication (EUR 2 206), professional, scientific and technical activities (EUR 1 693), energy sector (EUR 1 612), human health and social work activities (EUR 1 569), public administration and defence (EUR 1 433), as well as mining and quarrying (EUR 1 322).

The lowest average gross earnings were observed in accommodation and food service activities (EUR 811) and education (EUR 988).

Growing gap between earnings in Riga and regions

In the 1st quarter of 2022, compared to the 1st quarter of 2020, the sharpest rise in the average net wages and salaries was recorded in Riga (of 7.5 %) and Pierīga (7.0 %), thus leaving the greatest influence on the change of the national average rate. The highest average gross earnings for full-time work were observed in Riga (EUR 1 467), whereas the lowest in Latgale (EUR 882 which is 40 % fewer than in the capital). It should be noted that the gap in the average earnings between Riga and regions grew over the year.

Hourly earnings – EUR 8.72

In the 1st quarter of 2022, gross hourly earnings amounted to EUR 8.72 (EUR 7.96 in the 1st quarter of 2021), and over the year they grew by 9.6 %.

Hourly labour costs that include wages and salaries as well as other labour-related expenses of the employer over the year rose from EUR 9.94 to EUR 10.99 or by 10.6 %, which was due to the increase in the total labour costs and hours worked – of 13.3 % and 2.4 %, respectively.

Greatest increase in Lithuania

In the 1st quarter of 2022, the highest average gross earnings among the Baltic states were registered in Lithuania – EUR 1 730 for full-time work, followed by Estonia with EUR 1 593, and the lowest wages and salaries were recorded in Latvia – EUR 1 297.

Compared to the 1st quarter of 2021, the lowest annual increase rate of average earnings was registered in Latvia (6.9 %), in Estonia it constituted 8.1 % and the highest was recorded in Lithuania – 14.0 %.

It should be mentioned that at the beginning of the year minimum wage in Lithuania and Estonia was raised: in Lithuania from EUR 642 to 730 or by 13.7 % and in Estonia from EUR 584 to 654 or by 12.0 %.

Methodological explanations

 

The data source used for wage and salary statistics is the sample survey of merchants, state and local government institutions, foundations, associations and funds, as well as administrative data.

 

The CSB calculations of average wages in public sector include central and local government institutions and their commercial companies, companies with central or local government capital participation of 50 % and over, excluding foundations, associations, funds, and their commercial companies.

 

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

 

Information on the average earnings is broken down by region based on the address of the office or main activity of an enterprise or institution.

 

Average monthly and hourly earnings and change in labour costs are calculated from not rounded figures.

 

In line with the regulatory enactment of the European Union, when compiling data on labour costs, wages and salaries include remuneration in kind (goods and services provided by the employer to employees free of charge or at a lower price, living quarters, mobile telephone, transport compensation, etc.) and exclude payment for the days not worked due to illness that is paid by the employer. Other labour costs include statutory social security contributions payable by the employer, employers’ contractual and voluntary social security contributions (additional pension insurance contributions, health and life insurance contributions, etc.), support payments from the employer, gifts, payments for sick list A, severance pay, entrepreneurship state risk duty.

Media requests:
Communication Section
E-mail: media@csp.gov.lv
Phone: +371 67366989, +371 27880666

More information on data:
Lija Luste
Wage Statistics Section
E-mail: Lija.Luste@csp.gov.lv
Phone: +371 67366917

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