Latvia to increase minimum wage to 820 euros next year

Latvia's minimum wage is set to increase by 40 euros next year, reaching 820 euros. This increase is lower than the 55-euro rise suggested by the current calculation formula, which dictates that the minimum wage should equal 46% of the country's average wage. Based on that formula, the minimum wage would have reached 835 euros.

Following discussions between government officials, employers, and trade unions, the Ministry of Finance's proposal was supported. Finance Minister Māris Kučinskis noted that deviating from previous agreements on gradual increases is due to the complex current economic situation.

Andris Bite, president of the Latvian Confederation of Employers, stated that the primary impact of these changes would be felt by municipal and public sector budgets rather than private sector employers, as many salaries are linked to the minimum wage. There are also concerns that a faster increase could narrow the pay gap between minimum wage earners and qualified workers. Trade unions have suggested a compromise involving simultaneous increases to both the minimum wage and the tax-free minimum, which is currently set at 570 euros.