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Wages grew almost 9 times
According to data from the Lithuanian Department of Statistics, on 1 January 1995, the average salary in the hands of Lithuania was 105 euros and amounted to only 7.9 per cent. the salary in Germany at that time, which amounted to 1331 Eur.
“Since 1995 the change in wages in Lithuania is impressive,” Ž. Maurice said that compared to the third quarter of 2020, it has increased almost 9 times since 1995, while in Germany it increased only 1.6 times.
According to the Statistics Department, the median salary has increased moderately since 1995, rising by a few tens or tens of euros a year until 2000.
Faster growth has been observed since 2006, but in 2009, when the country was in crisis, wages fell slightly and began to rise again in 2011, when they amounted to 461.8 euros.
Wage increases accelerated further after Lithuania joined the euro area in 2015.
In 2016, compared to the previous year, it increased by almost 50 euros, a similar growth was also in 2017, when the average salary in the hands increased from 602.3 euros to 660.2 euros.
On January 1, 2018, it grew even more and was 720 euros, and in 2019 it reached 822.1 euros. According to the latest data, in the third quarter of 2020, the average salary in Lithuania amounted to 922 euros per hand.
“The difference between the Lithuanian and German wages in 1995 was more than 12 times. And now that difference remains a little more than 2 times.
Now 2020 Q3. According to the data, the average Lithuanian salary is already 44.2%. Alemán ”, compared the economist.
Growth was driven by three reasons
Ž. According to Maurico, several things helped him catch up faster and get closer to German salary: Lithuania’s membership in the European Union (EU), NATO membership, and the euro introduced in 2015.
“This allowed Lithuania to make a very fast advance compared to other countries in the former Soviet Union and to catch up with the western states at really impressive speed.
Lithuania’s salary and economic growth from 2004 to 2020 was one of the fastest in Europe, ”he said.
When asked if the average salary in Lithuania will continue to approach that of Germany, the economist said that it would not be very easy to catch up with this country.
“The closer we get, the more difficult it becomes.
If we look at the history of Eastern Europe, it has been practically a little poorer than Western Europe all along, and those changes are inert enough, they don’t happen suddenly.
What helps to bring about sudden change are some negative things on the other side of the barricades, let’s say if the West collapses then we could catch up, but here is the big question, because we are very dependent on them and only a few countries have made great progress. , He explained.
Sigismund Mauricas
According to Ž. Maurico, an example could be Ireland.
“She until 1980. At the end of the 19th century, Lithuania was at a similar level to what it is now, and in 20 years Ireland has not only managed to catch up, but has also surpassed Germany and has become the country of the richest EU after Luxembourg.
Its success was due to the aggressive tax and investment attraction strategy chosen. Companies are moving to Ireland because there are lower taxes and they still have access to the EU market, ”he explained.
As another example, the economist gave Finland.
“It was at a level of development very similar to that of the Baltic states in the interwar period, it also suffered during the Second World War, and they purposely chose the direction of rapprochement with the Scandinavian countries and sometimes even formally attributed a great achievement. This they did over a longer period of time, 30 to 40 years, but they practically reached and even bypassed the Scandinavian countries and Sweden at the same time. And they applied the welfare state model, “he said.
The truth is which one is better for Lithuania, Ž. Maurice assured us that today it would be better for us to follow Ireland’s example.
“It is not yet clear in which direction Lithuania is going. There may be a greater desire to follow the path of prosperity, but we seem to be following Ireland’s lead and are distracted. This is the biggest challenge, because we are not choosing that path specifically , which we want to take, and the big question is whether we can replicate the success of Finland, because our society is much more divided.
I would say that it would make more sense to apply the Irish model and apply a more aggressive investment attraction, because the Finnish model may not be successful at all, because there are great tectonic failures in society, regional, social, educational exclusion, which will not be easy to cover, ”said the economist.
See challenges
Speaking of forecasts, Ž. Mauricas said that this year Lithuanians expect a lower wage increase than last year, and it is all due to the prolonged quarantine.
“Economic growth will also be slightly lower, but we can still generate between 4 and 5 percent wage growth, and that would be and in 2022, 2023, or even more.
Failure to do so, once again, could generate some frustration among certain sectors of the population and, again, lead to emigration and brain drain, who are talented, hardworking, have ideas.
Because those salaries, their differences, are still measured sometimes. This can lead to stagnation and brain drain.
Portugal is in a situation like this, they announce that they have a good climate similar to that of California, but the talents keep coming out of Portugal.
“To ensure sustainable growth and balance emigration, the wage gap needs to be a percentage, not sometimes, that’s why we need to increase wages,” he said.
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