The pandemic has been affecting the whole world extremely negatively in economic terms. While unemployment is increasing in many countries, there are some unwanted changes made, such as lowering wages. However, it should not be forgotten that there are exceptions like Latvia. Latvia decided to increase the minimum wage in this period when the economic indicators in the world are going down. Yes, the minimum wage in Latvia will be increased in 2021. Well, how has Latvia been able to increase during this pandemic period? What will be the minimum wage in Latvia in 2021?
Europe’s Shining Economy Latvia
Latvia draws attention as one of the outstanding economies of the last period. In Latvia, which has a special place among the Baltic countries, the minimum wage has been the same for 3 years. It was predicted that it would not change this year due to the pandemic. However, considering the economic data in the country, it was decided to increase the minimum wage as a result of the agreement between the government and the opposition. So, what will be the minimum wage in Latvia?
The minimum wage was 430 Euros until 2020. With the change made, starting from January 2021, the minimum wage will be 500 Euros. It means that the salaries of more than 200 thousand employees working with the minimum wage in the country will be increased by more than 15%.
The number of employees in Latvia is around 800 thousand. On the other hand, there are approximately 40 thousand employers in the country. Approximately 200 thousand of the employees receive the minimum wage and their salaries will increase by approximately 16% in January 2021 and will be 500 Euros.
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The Change of Latvian Economy Over the Years
The state of the Latvian economy grasped attention when it increased the minimum wage during the pandemic period. Latvia, which did not have a very remarkable economy in the past, has succeeded in making a serious leap, especially in recent years. The country, which experienced rapid change and development after EU membership, managed to grow steadily until the pandemic process. However, it was estimated that the growth would stop with the pandemic. Considering that the economies of many countries in the world have recessed between 5% – 10% in this period, it can be easily stated that Latvia has been also successful in this period. Every year, many investors continue to use their savings effectively by establishing a company or investing in real estate in Latvia. Foreign investments made last year alone exceeded 7 Billion Euros.
Latvia is located close to major markets such as EU countries, Russia and Scandinavian countries. Taking advantage of this, the country attracts entrepreneurs to its country and provides growth in exports with these investments. In this way, it both managed to grow its economy and time gained the power to pay higher salaries to its employees at the same.
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Igors Krumins continues his activities as a commercial and international lawyer within the body of “Jurmala Invest”. He has more than 10 years of experience, especially in the investment sector, and has provided consultancy services to numerous companies with his legal expertise. He successfully completed his undergraduate studies at Baltic International Academy and graduate studies at Latvijas Universitate. Apart from his native Latvian language, he can also speak Russian and English fluently.