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“This is a long-term trend, however, the gap between Vilnius and the regions is not a short-term phenomenon, as Vilnius’ competitiveness is much higher.” Naturally, the labor market here is much more efficient, attracting both professional potential from all over Lithuania, as the institutions of higher education here are the forge that prepares the workforce. Respectively, competition between employers and employees themselves ensures that the pace of wages in the capital and other large cities is growing faster than in the periphery, ”I. Genytė-Pikčienė told Eltai.
According to the economist, wage growth in the capital has greater potential than in the regions.
“The truth is that in recent years the monthly minimum wage has risen quite significantly, which has maintained the growth rate in other regions and has prevented this gap from widening significantly. Still, Vilnius is oriented towards higher value-added activities, it is already an internationally visible economic center, so it is natural that wages here have a higher growth potential than in other Lithuanian cities, ”he said.
According to the analyst, the quarantine was an atypical test for all businesses, but most affected those who had the most difficulty adapting to teleworking.
“In regional terms, Vilnius is home to high-value-added technology companies that have technologically more easily adapted their activities to the challenges of quarantine and implemented teleworking much more quickly. At that time, there are more industrial and manufacturing activities in the periphery, where contact with both processes is necessary.
Of course, there are many more operational challenges for manufacturing companies. They first had to deal with the challenges of the liquidity crisis, smoothing and securing financial flows, which certainly meant there were far fewer opportunities to increase wages. The companies were more concerned with the continuity of their activities and job retention in general than with thinking about how to motivate an employee with a higher salary, ”said the economist.
According to I. Genytė-Pikčienė, there shouldn’t be many reasons for salary growth this year.
“This risk, anxiety and uncertainty will continue throughout this year. Naturally, there won’t be much potential for pay increases. If we differentiate wage growth rates by public and private sector categories, then wage growth occurs mainly in the public sector. In the private sector, wage growth is slowing. “The pandemic economic crisis is not over yet and there is a lot of uncertainty,” the economist told Eltai.
According to her, regional exclusion is currently set to increase.
“Regional exclusion is being fueled by many governments one after another, and that exclusion is set to increase. Lithuania is quite diverse in terms of regional distribution, and the regions have their own competitive advantages, there is simply a lack of ambition to use them in certain areas. There are many problems in the provision of education and workforce. Future external investors are wondering, first of all, if there will be enough workforce, “said I. Genytė-Pikčienė.
According to the Department of Statistics, the average monthly gross income in the national economy (excluding sole proprietorships) in the second quarter in the Vilnius region was 1,556.9 euros and, compared to the first quarter, increased by 0.9 percent.
In the region of Western and Central Lithuania, gross wages and salaries were 1273.4 euros and increased by 1.5% during the quarter.
The gross pay gap between these regions was € 284 in the second quarter.
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