Currently the Lithuanian minimum monthly wage for the next year is being negotiated in the Lithuanian Tripartite Council. The 20 euros raise, suggested by the Lithuanian government, does not meet expectations of trade unions and our represented workers. The Lithuanian trade unions are strongly determined to increase the minimum monthly wage by 50 euros so that it would reach 450 euros. This would amount 50% of the average wage in Lithuania.
Despite the fact that this indicator is much smaller than recommended by the European Trade Union Confederation the representatives of the government claim that even our proposed raise would be too prompt and the Lithuanian employers would be influenced negatively by it. Nevertheless, this argument does not hold up to scrutiny. The Lithuanian trade unions stress that due to the extremely decreased purchasing power, even the raise of the minimum monthly wage by 50 euros is insufficient.
Many international organisations criticize Lithuania for sharp income inequality and broad social exclusion. In comparison with the other countries of the EU the level of income from work is low and our ‘shadow’ economics extensive. In 2015 almost 10% of workers in the EU Member States were living at risk of poverty. In Lithuania this indicator reaches 22% (2016). The tempo of growth of Lithuanian workers‘ income is lagging behind the pace at which the country‘s productivity is increasing
In April the European Trade Union Confederation has issued an ‘emergency alert’ which highlighted countries and situations where the opportunity for working people in Europe to achieve decent wages and working conditions is under threat. We see that Lithuania is one of those countries with the largest number of ‘red’ warnings (with Czech Republic, Estonia, Greece, Hungary and UK). It is clear that the situation has to change. The raise by 50 euros would be one of the steps to the right direction.
Because a practice of sectoral agreements considering the financial part of salaries does not exist in Lithuania our government has to use every available mean to mitigate the current situation. An indexation of minimum monthly wage is the only mechanism through which states may impact the growth of wages directly. This opportunity should not be wasted.
Currently the minimum monthly wage does not guarantee a decent living. Many Lithuanians face the so-called in-work poverty. If workers do not have additional income from other sources they and their families are at risk.
Recently Lithuania became a member of the OECD. Insights of their experts in the ‘Reviews of Labour Market and Social Policies: Lithuania’ state clear: the gap of wages between the Lithuanian and other European countries is diminishing too slow.
LPSK emphasizes that the ratio of average wage to the minimal monthly wage in Lithuania should not be smaller than 50%. We note that in comparison with other countries it should be even higher and, furthermore, there is no analytical data to back the statement that further increases of the minimum monthly wage would cause danger to the Lithuanian economics. After a direct query about this indicator the Lithuanian National Bank agreed that this index is just a recommendation and it is based on theoretical assumptions.
Furthermore, there are suggestions to differentiate the minimum monthly wage by different regions. The Lithuanian trade unions are strictly against it. In our opinion, it would weaken regions even further and raise our emigration level even more. Despite the declarations of our government that the strengthening of regions is their priority, their actions contradict it. This would be a shortsighted decision which would bring a lot of damage to Lithuania. The employers’ organisations in the Lithuanian Tripartite Council are enthusiastic about this suggestion made by the Government despite the complains that they cannot find workers even if they offer better than minimum monthly wages.
In the meeting of the Tripartite Council which will be held in the end of August the representatives will discuss the increase of the minimum monthly wage once again. We remind that the goal of the Lithuanian trade unions is that the minimum monthly wage would be raised by 50 euros from 2019.