Wage growth still rapid in Latvia despite higher unemployment in 2020
- Average wage up 6.2% in 2020 - only slightly slower than in 2019.
- Total wages rose more slowly than average wage, reflecting reduced working hours and job shedding.
- Most sectors saw slowdown, while only a few recorded a decline.
Average wage growth rebounded quickly after slowing in Q2 and rose 6.7% y/y in Q4. Wage data for Q1-Q3 were revised up. The rapid pace of growth was supported by structural changes in the labour market in favour of sectors paying higher wages. Similar trends likely prevailed also at a company level. Moreover, companies preferred cutting working hours and jobs to cutting wages. Wage bill growth slowed from 8% in 2019 to 2% in 2020. A minimum wage hike of 16% together with expected economic recovery in H2 2021 will boost wages this year. The inverse developments in labour market structure this year will limit growth, though. Nevertheless, the average wage growth is expected to come closer to 7% in 2021.
For more information please contact Ms. Agnese Buceniece, +371 67445875, email@example.com
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