In the third quarter, the average monthly gross wage in the country for full-time work was 1,280 euros, and compared to the third quarter of 2020, the average monthly wage increased by 121 euros or 10.4%, but the wage per hour worked before taxes – by 4.4% from 8.09 to 8.44 euros, according to the Central Statistical Bureau (CSB).
In the third quarter of 2021, compared to the second quarter, the average monthly gross wage increased by 3.4%, while the hourly wage decreased by 1.6%.
The average net salary (calculated using workplace taxes) was 940 euros or 73.4% of gross salary. It increased by 10.3% during the year. The real increase in net wages and salaries, taking into account the rise in consumer prices, was 6.3%.
The median gross wage for full-time work in the third quarter of 2021 was 1,003 euros. Compared to the third quarter of 2020 (917 euros), it increased by 9.3%. The median wage and salary (net) after employment taxes in the third quarter of this year was 749 euros, and it increased by 8.1% during the year.
The median is calculated using available information from statistical surveys and State Revenue Service data.
The median is the average in the middle of the wage series for ascending or descending workers, ie half of the wages are higher than the median and the other half are lower. As the median compared to the arithmetic average wage is not affected by the extreme wage values, it better describes the typical wage.
In the third quarter of 2021, the average monthly gross wage in the private sector was 1280 euros, and it increased by 10.4% during the year. In the public sector, the average wage was 1,287 euros, and its annual growth rate was slightly faster at 10.9%. In the general government sector, which includes state and local government institutions, as well as state and local government controlled and financed capital companies, the average wage increased to 1260 euros or by 11.9%.
Compared with the second quarter, average wages and salaries in the private sector increased by 5.3%, while those in the public and general government sectors decreased by 0.3% and 0.6%, respectively.
Changes in average wages and salaries are affected not only by the increase or decrease in wages and salaries, but also by structural changes in the labor market – companies that started and closed during the year, changes in the number of employees and workload in 2021. crisis.
In addition, the third quarter of this year saw significant changes in the area of labor-related taxation, with the introduction of minimum mandatory state social insurance contributions on 1 July and the end of the transitional period after which all employees of micro-enterprise taxpayers must pay labor taxes as a general rule.
The impact of these factors is generally reflected in changes in the wage bill and the number of full-time employees used to calculate average wages.
In the third quarter of 2021, compared to the third quarter of the previous year, the wage bill in the country increased by 11.1% or 283.6 million euros, the number of employees, recalculated full-time, increased by 4400 or 0.6%.
During the year, average wages and salaries grew the fastest in the health and social care sector – by 24.3%, where both the remuneration fund and the number of full-time employees increased. A similar trend was observed in mining and quarrying, manufacturing, trade, information and communication services.
In the third quarter of 2021, the average monthly wage for full-time work was higher than the national average – in financial and insurance activities, information and communication services, professional, scientific and technical services, health and social care, energy, public administration, mining and quarrying. in the quarrying industry as well as in construction.
The lowest average wages before taxes were in the accommodation and food service sector (855 euros) and in education (988 euros).
The highest average monthly salary before taxes for full-time work in the third quarter of 2021 was in Riga – 1427 euros, while the lowest – in Latgale (912 euros), which is 36% less than in the capital.
During the year, the average gross wage grew the fastest in Latgale – by 13%, the lowest increase was in Vidzeme – by 9.5%.
Gross wages and salaries per hour worked in the third quarter of 2021 were 8.44 euros, and during the year it increased by 4.4% (in the third quarter of 2020 – 8.09 euros).
Compared to the third quarter of last year, hourly wages and salaries decreased in real estate (by 4.9%), other services (including activities of public, political and other organizations, repair of personal and household goods, dry cleaning, hairdressing and other beauty treatment). other services) in industry (by 4.5%), accommodation and food service activities (by 4.2%), as well as in construction (by 0.8%) and manufacturing (by 0.2%).
Hourly labor costs, which include both wages and salaries and other employer-related labor costs, increased from € 10.22 to € 10.64 or by 4.0% over the year, driven by an increase in total labor costs and hours worked, respectively. by 10.6% and 6.3% during the year.
Dainis Gašpuitis, an economist at AS SEB banka, emphasizes that the news about the rise in wages is one of the biggest resonant news on a quarterly basis. Most of them think about their experience and the dynamics of personal salary changes. “No one is encouraged to change their place in the labor market, especially if the change results in a higher wage. However, not everyone’s pay is reviewed every year, but raising their colleagues’ wages affects the overall statistics. Twice a year, especially in lower-paid occupations, which could be exacerbated by conditions of persistently high inflation, while average wage growth is driven by relatively favorable economic conditions and labor shortages, especially in sectors where wage levels are already above the national average. will even intensify over time, “comments D. Gašpuitis.
According to him, the increase will become more and more noticeable in the sectors affected by the crisis – due to the lack of employees, as well as the operating conditions will stabilize. The pandemic has led to wage growth in health care, where wage growth has been the fastest at 24.3%. The increase in wages in the public sector and the increase in the minimum wage will be an important factor in the increase in the average wage in 2022 as well. It is unpleasant to see the low position of education, which indicates the urgent and significant need to raise wages and at the same time motivate those working in the sector in order to maintain reasonable expectations for a positive economic outlook.
D. Gašpuitis notes that the pandemic has affected the structure of wages – with an increase in the number of high wage earners and a decrease in the number of low wage earners, which has increased inequality. The rapid rise in wages continues to be closely followed by inflation. However, it does not appear to be able to achieve a decline in average purchasing power, although the number of workers whose wage growth will not be able to compensate for the rise in prices will increase, especially without sparing those on low incomes.
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