Latvia’s Wage Stagnation: A Deep Dive into Salary Trends adn Worker Expectations
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In 2025, Latvia faces a pressing issue: stagnant wages. A recent survey reveals that 80% of Latvian workers have not seen a salary increase this year, with only 20% expecting a raise starting January. This data, gathered by the research firm KANTAR on behalf of 360TV News, paints a concerning picture for the nation’s workforce.
Worker Sentiment: Hope vs. Reality
The survey targeted Latvian residents aged 18 to 65, focusing on those whose salaries remained unchanged since January 1. When asked about the likelihood of a pay raise in the near future, 25% expressed optimism. Though, the majority—64%—were skeptical or outright pessimistic. Of this group, 27% were certain their wages would remain stagnant.
How Much of a Raise is Enough?
KANTAR also explored the question: “How big should the monthly salary increase be after paying taxes to offset rising costs of goods and services?” The responses varied widely. 50% of participants believed a raise of up to 200 euros would suffice. Simultaneously occurring, 40% argued for a more substantial increase—over 200 euros—to combat inflation. A smaller but critically important group, 14%, felt that a raise exceeding 400 euros was necessary to make a meaningful difference.
What Does This Mean for Latvia’s Economy?
The findings highlight a growing disconnect between worker expectations and employer actions. With inflation driving up the cost of living, many Latvians feel their wages are no longer sufficient to maintain their standard of living. This sentiment is particularly strong among those who have not seen a pay raise in over a year.
Experts suggest that addressing wage stagnation is crucial for sustaining economic growth and worker morale. Without meaningful salary adjustments, Latvia risks exacerbating income inequality and reducing consumer spending power, which could have long-term repercussions for the economy.
Key Takeaways
- 80% of Latvian workers have not received a salary increase in 2025.
- Only 20% expect a raise starting January.
- 64% doubt or are certain their wages will remain unchanged in the coming months.
- Workers are divided on the ideal raise amount, with 50% advocating for up to 200 euros and 40% pushing for more.
As Latvia navigates these challenges, the conversation around fair wages and economic stability continues to gain momentum. For now, workers remain hopeful but cautious, waiting to see if their employers will take steps to address their financial concerns.
What are the main structural challenges impacting wage growth in Latvia?
Interview with Dr. Anna Bērziņa, Economist and Labor Market Expert, on Latvia’s Wage Stagnation
By Archyde News
Archyde: Dr. Bērziņa, thank you for joining us today. A recent survey by KANTAR reveals that 80% of Latvian workers have not seen a salary increase in 2025, and only 20% expect a raise in the near future. What are your thoughts on this alarming trend?
dr. Bērziņa: Thank you for having me. The data is indeed concerning, but it reflects a broader issue that has been building in Latvia’s labour market for years. Wage stagnation is not just a 2025 problem—it’s a symptom of deeper structural challenges, including low productivity, an aging workforce, and insufficient investment in high-value industries. While the global economic slowdown has exacerbated the issue, Latvia’s wage growth has lagged behind its Baltic neighbors for some time.
Archyde: You mentioned structural challenges. could you elaborate on what these are and how they contribute to stagnant wages?
Dr. Bērziņa: Certainly. One major factor is Latvia’s reliance on low-value-added industries, such as agriculture and low-skilled manufacturing. These sectors frequently enough operate on thin profit margins, leaving little room for wage increases. Additionally, our workforce is aging rapidly, and younger, skilled workers are emigrating to other EU countries in search of better opportunities. This brain drain further limits our ability to transition to higher-productivity sectors like technology and advanced manufacturing.
Another issue is the lack of robust wage-setting mechanisms. While the government has increased the minimum wage, this hasn’t translated into significant wage growth across the board. Employers, notably in small and medium-sized enterprises, often cite economic uncertainty as a reason for freezing salaries.
Archyde: The survey also highlights a disconnect between worker expectations and reality. Only 20% of workers expect a raise,despite widespread dissatisfaction with current wages. What does this say about the state of worker sentiment in Latvia?
Dr. Bērziņa: It’s a clear indication of eroding confidence in the labour market. Workers are feeling the pinch of inflation, which has outpaced wage growth in recent years.Many are also skeptical about the government’s ability to address these issues effectively. This pessimism can have long-term consequences, such as reduced productivity and increased emigration.
However, it’s crucial to note that not all sectors are equally affected. Such as,industries like IT and finance have seen stronger wage growth due to high demand for skilled professionals.The challenge is ensuring that these gains are more evenly distributed across the economy.
Archyde: what steps can the government and employers take to address wage stagnation and restore worker confidence?
Dr. Bērziņa: There’s no silver bullet, but a multi-pronged approach is essential. Frist, the government must prioritize policies that encourage investment in high-value sectors, such as tax incentives for tech startups and funding for vocational training programs. This would help create higher-paying jobs and reduce reliance on low-wage industries.
Second, employers need to recognize that stagnant wages are not sustainable in the long term.Offering competitive salaries and benefits is crucial for retaining talent and boosting morale. Some companies are already taking steps in this direction by linking pay increases to performance metrics or offering profit-sharing schemes.
there needs to be greater collaboration between the government, employers, and workers to develop a extensive strategy for wage growth. This could include setting sector-specific wage targets and improving collective bargaining mechanisms.
Archyde: looking ahead, do you see any signs of improvement in Latvia’s wage situation?
Dr. Bērziņa: It’s a mixed picture. on one hand, the global economy is expected to recover in the coming years, which could create more opportunities for wage growth. On the other hand, Latvia’s structural challenges won’t be resolved overnight. The key is to stay focused on long-term solutions rather than speedy fixes.
I’m cautiously optimistic that with the right policies and a concerted effort from all stakeholders, we can reverse the trend of wage stagnation. But it will require patience, persistence, and a willingness to make difficult decisions.
Archyde: thank you, Dr. Bērziņa, for your insightful analysis. We hope to see progress in Latvia’s labour market in the near future.
Dr. Bērziņa: Thank you. I share that hope and remain committed to working toward a more prosperous future for Latvia’s workforce.
End of Interview
This interview was conducted by Archyde News as part of our ongoing coverage of economic and labour market trends in Latvia. For more insights, visit our website.
