Survey of employers: wages are twice as high as expected

Experts in the Citadele index concluded that the labor force could solve the average gross salary of at least 1,400 euros, which would encourage returnees to return, to automate, to attract the hand -d work controlled and produce more. In turn, the rapid rise in wages can be a trap for the Latvian economy.

With the difficult demographic situation, the labor market in Latvia is shrinking. And today, wages in Latvia are increasing twice as fast as entrepreneurs have planned to increase, according to the Citadele Business Survey Index and statistics on the increase. average salary. Martins Āboliņš, an economist at Citadele Bank, warns that wage growth could prove too fast as entrepreneurs will not be able to earn as much and will be a trap for the Latvian economy – wages for a high economy , but not enough to stop emigration

Are the resources of the local labor force exhausted?

Minister of the Economy Arviel Ašeraden recognizes that labor market tensions are increasing: work reserves are gradually decreasing while wages are rising.

"More than 600 people have registered in our database and want to return and work in Latvia for emotional or personal reasons." We need to focus on those who have left Latvia, "said Reinis Znotins, founder from the portal of employment and information "Yourmove.lv".

The Bank "Santa Purgaile, member of the Board of Directors of Citadele, believes that wage growth does not increase. is not the only solution to the problem of work: "Of course, the pay is important for a person, but the working conditions, the importance of work, what is important job stability, social security , how also has the necessary infrastructure near the place of residence – transportation to get to work, educational institutions for children, etc. With regard to reimmigration, it is important to know how and how the adaptation of repatriated children to Latvia takes place in our educational institutions.

The Minister finally emphasizes that the mechanism of information and badistance to citizens has been successfully implemented. who wants to come back and work in Latvia.

How much salary to pay?

In response to the question of what wages should be paid to contractors in order to keep employees, "Cobol said:" In the Riga area, where the balance was neutral, which means that the departure was about the same as returned, the average salary was over 1000 euros before tax. For employees aged 30 to 40, the average salary was about 1200 euros. So keeping a lower salary in the Riga area will be difficult. In the regions, there are still more than those who have arrived, because the average wage has not yet reached its level, so as not to disappear. At the same time, regional entrepreneurs point out that wage growth not only reduces the profit of entrepreneurs but also their activities. It is therefore difficult to raise wages without investing in development. "

" Deaths want to receive 1,000 euros per head, "says Znotin, pointing out that the key is communication," people have to talk about companies that offer competitive compensation and good working conditions. It is also important to talk about the cost of living comparison between Latvia and other European countries. For example, renting a two-room apartment in London is 4.3 times more expensive than renting a similar property in Riga. Therefore, the size of wages must be considered in the context of where a person lives. Employers recommend that this data be used more effectively, explaining the reduction of wages to be taken into account when returning to Latvia. Unfortunately, many employers do not address these issues. In terms of wages, many are surprised to know about employment opportunities and wages in Latvia, as they often think that wage levels have remained at the level of the crisis years.

The Minister of Economy admits that the migration problem will be solved Asheraden stresses that productivity in most sectors in Latvia is well below the EU average: "There is a big gap between costs and productivity ". and wages are rising faster than productivity. Latvia is losing competitiveness in low-cost segments. Entrepreneurs have accumulated experience and capital, now we have to move on to the next step. You must restructure your business by offering products and services with high added value. It is also important to invest in the training of people. Entrepreneurs need to unite, create the necessary programs to train people, provide their own employees. Maris Peilans, head of the road construction company "Igate" and manufacturer and exporter of wooden pallets Marko KEA, stresses that it is important that the state ensures that Latvian companies remain competitive with other companies in the export markets. The cost of raw materials and labor costs are two of the elements with which Latvian economic operators can be competitive: other costs such as fuel, electricity, taxes, availability of equipment are equivalent to those of other European countries. "By investing more than a million euros in automated wood pallet manufacturing plants, we have reduced the number of employees from 15 to 4. Thus, we can produce high-end goods. quality and provide employees two tr a few higher wages than competitors. And all this five years ago, since we invested in equipment, we work non-profit. Manufacturing contractors face a dilemma when they choose to invest in equipment or increase their wages. Both can not. "

At the same time, he notes that" there will always be companies that can not mechanize or rob everything. This will always require a low-skilled workforce with limited compensation capabilities. That is why we are learning from the European experience and importing the workforce, leaving our staff in highly skilled positions.

Peilans calls on the government and politicians to reduce the barriers to employment of immigrant workers for low-skilled jobs: "When they travel abroad, Latvians are ready to work many, but they are not ready to do it. they can earn more with this job. Therefore, guest workers are needed, for example, in Ukraine, in Belarus, who would be willing to do it with us. Poland, which is our competitor in the export markets, has already opened its market to foreign workers. We have been working for four months to recruit in Ukraine, but the political context prevents it.

The Minister of the Economy notes that the government made the political decision not to open the labor market to cheap labor. Latvian businessmen can now attract in a relaxed manner highly qualified foreign experts.