Salary/wage drop rate accelerated

According to the data of the Central Statistics Agency published today, the average hourly wage in the fourth quarter of 2009 had dropped by 12.1% year-on-year. In the public sector the greatest drop in remuneration was still observed, at 23.7%, in the private sector, it was 5.0%.

It must be noted that the salary/wage statistics is affected also by the changes in the employment structure. Since layoffs have affected the less qualified workers or those who receive lower salaries, the percentage of highly qualified specialists and thus also the percentage of receivers of higher salaries in employment statistics. For example, according to a survey of labour, the number of employed specialists contracted over 2009 by 1/5 whereas the number of senior specialists (a rank higher) remained almost unchanged. According to Bank of Latvia’s calculations, the effect of the employment structure in 2009 created an offset in the annual change of the average hourly wage by 2 percentage points and the actual contraction in wages was probably more pronounced. The above developments indicate that the gap that was created in previous years between salaries and productivity has been reduced, improving the competitiveness of Latvian businesses.