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The Maxima retail chain has increased its salaries by 8 million euros this year. For example, the salary of the store employees increased by almost 100 euros. For employees of food production workshops: a little more than 200 euros.
“In the first quarter of this year, compared to last year, the average salary has increased by 11 percent. The scope of employee bonuses has also expanded from last year. Incentive bonuses are not only once, but an additional remuneration that our employees receive every month, “said Tomas Bašarovas, Maxima representative, at LNK.
Sodra data also shows that median labor income rose 11 percent to € 1,465 on paper or € 937 on hand.
Medical salaries grew faster, but this was driven by supplements to fight the pandemic.
Wages grew rapidly in education, professional and scientific activities, retail and wholesale, and manufacturing.
“Supplements paid for physicians also contributed to the growth of average labor income, the increase in the monthly minimum wage by almost 6 percent this year has contributed. But the third very important factor when we look at the growth of average labor income is that the pandemic affects different economic sectors differently, ”said Kristina Zitikytė, Advisor to the Sodra Statistics, Analysis and Forecasting Division.
The wage growth in Lithuania surprises not only the country’s economists, but also international organizations.
“Let me remind you that in the spring of last year, the European Commission forecast for Lithuania that wages would fall by 8 percent last year. Instead of an 8 percent drop, we got growth of almost 10 percent. And This year, despite a really tougher and longer quarantine in the EU, we see wage growth accelerate even more. And Lithuania really stands out not only in the EU context, but also in the regional context. ” Sigismund Mauricas, Luminor’s chief economist, told LNK.
Lithuania is ahead of everyone in the region. In Estonia, wages increased by only 3-4 percent, in Latvia by about 8 percent, and in Poland by about 6 percent.
“There are some concerns that we will not inflate a certain wage price bubble, as well as the housing and consumer bubble. We live in such euphoria, which is perfectly reflected in consumer expectations, which are among the best in the EU.” , said the economist Ž. Mauricas.
Other economists, looking at such wage growth, recall the overheating of the economy in 2006-07, when Lithuanians lived in a similar euphoria before the crisis.
“At the time, everyone was also happy that the average salary was increasing by 20 to 25 percent per year. But when that salary growth is much faster than productivity growth, sooner or later it will have an impact on the business competitiveness, ”said Nerijus Mačiulis, chief economist at Swedbank.
The pandemic has also deepened the divide between those who earn the most and those who earn the most. Their salaries vary 6.5 times.
President Gitanas Nausėda proposes to increase the Income Exempt Amount (NPD) to 450 euros, which would cost the state budget between 40 and 80 million euros. But it would increase the income of the lowest income earners. Economists support such a proposal.
“This is one of the best ways to increase the income of those who earn less. I mentioned some time ago that the NPD should be at least the minimum monthly wage,” said N. Mačiulis.
Lithuania’s economic growth in the first quarter of this year, compared to the same period last year, was one of the largest of the 20 EU countries that published data, according to Eurostat data.
Not only are wages rising, but also inequality
Wages in Lithuania continue to rise at cosmic speeds, but the gap between those who earn the most and those who earn the most has also increased significantly. Economists say that wage growth in Lithuania stands out not only in the Baltic states, but also throughout the European Union.
Inga Ruginienė, President of the Trade Union Confederation
“There are certain nuances to the rapid wage growth. First of all, the average worker hasn’t even felt that rapid growth lately. It must be recognized that managerial salaries have risen rapidly, as evidenced by the segregation between the lowest and highest earning employees. 6.5 times, that is an inhuman number that brings us to the margins of the European Union. Because the EU is normal 2-3 times, “said I. Ruginienė.
“The other thing that leads to higher average wages is the pandemic itself. Because various professions that work in harmful conditions have received allowances. This also raised the average wage slightly. It should be understood that a pandemic, an emergency, will end soon. And the accessories will end up like this. And then most of the employees will see reality, with the low wages that they stayed, “said I. Ruginienė at Info Day.
The interlocutor of the program argued that such a calculation was incorrect.
“As I said, the average person does not really feel that big sudden increase in salary. Even more so when you look at what is happening around them: prices have taken a big jump and are likely to continue rising until the fall. We say that the salary of a common worker who earns up to the median income, or up to the average salary, can certainly grow and must grow. Otherwise, we will have an even higher level of poverty in the fall ”, predicted I. Ruginienė, the interviewee of the program.
He said the end of the pandemic would be a clear “painful reality” when prices rise and wages return to pre-pandemic levels.
“This is exactly what we emphasize in the negotiations on the Minimum Monthly Wage (MMA). No matter how employers say that wage growth is rapid, sadly it is not enough. And that is shown by all the indicators and calculations. He does not want , and the shortage of employees that employers complain about shows that it is time to raise salaries quickly, “said the interlocutor of the program.
I. Ruginienė stated that the salaries of those who earn should now be increased up to the average salary.
“It just came to our attention then. Let’s start with MMA and move forward step by step,” he urged.
I. Ruginienė assured that the rise of MMA will be felt in a few months.
“As unskilled work grows, so does its price. And for skilled work, employers are forced to raise wages accordingly to retain employees. This tool is good enough because we’ve never seen the good news. employers’ willingness to increase wages and we will not see it in the shortest possible time. This is perfectly illustrated by the same negotiations, “said the interlocutor of the program.
President G. Nausėda proposes to increase the NPD by 50 euros. According to I. Ruginienė, employers must take the initiative.
“We always welcome leadership to increase the salaries of those who earn less. But at the same time, we want to put a very important emphasis: we hope that the employers themselves will increase salaries and not look at the state budget. Because in any case , the tool to raise the NPD is at the expense of our state budget, and all taxpayers will contribute and pay that price so that our poor get more.
Yes, if we talk about the poor getting more in the end, we are in favor. But employers must not use state support, but must ultimately take responsibility and share the profits and increase wages, “said the president of the Trade Union Confederation.
He said the shortage of workers now is because they realize they don’t want to work in the conditions that employers now offer.
“It is up to employers to find key problems to find employees. First, provide the employee with safe working conditions, a good and decent enough salary, to raise his level. And no less important is psychological comfort in the workplace. By passing all these conditions, any employer is sure to have a number of employees lined up who will want to be there. It is complete nonsense to say that an employee cannot be found and that the employee is to blame for that, ”said I. Ruginienė on the“ Info Day ”program.
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