Opinion piece. Ilona Bērziņa, BNN
While the director of Latvia’s State Chancellery Jānis Citskovskis is busy talking about looking for «middle ground» on the wage scale and «horizontal initiatives» expected this autumn, the country’s top officials are celebrating getting a raise. Also it does not seem like officials are the least bit concerned that this year there is no money in the state budget to afford the increase of their pay.
I won’t say the government do not deserve a raise and that they can technically make do with EUR 1 384 on paper (even though many employed in the state administration can only dream of this amount). However, in a situation when 22.5% of Latvia’s population or 418 000 residents are subjected to the risk of poverty (according to data from the Central Statistical Bureau of Latvia), it may be a good idea to put the increase of wages of Saeima deputies and leaders of municipal council on hold or freeze them at their current level for some time, as mentioned by the author of the initiative submitted to the Saeima Nora Freimane.
Hierarchy and political muscle
The initiative was signed by 10 434 residents. The total number of signatures registered on Manaballs.lv platform in favour of this initiative at this time is at 15 116. One would think the number of people who believe the increase of wages for state officials and people’s representatives in the government should be postponed until the economic situation in the country has stabilised and inflation has been limited, and people no longer have to carefully consider their expenses upon receiving bills for utilities is much larger than that.
Nevertheless, the fact that the government is to be contemplated until the 15th of April, causes serious concerns that nothing will change. Because, oddly enough, the portion of officials that work their bones off for small wages will be able to increase wages only once it becomes clear how much the PM and other privileged people are paid. All that’s left is to conclude that
large wages are paid for big posts, political backup and muscle, not competence, skill or knowledge.
Nora Freimane describes this situation very accurately. She says: «The PM holds the lowest rating in history, but his wage will be the biggest any Latvian PM has every been paid. It would be like finding the worst employee in a company and paying him or her the biggest wage.» By the way, when President Egils Levits had an opportunity to reject law amendments and return it to the Saeima to fix them, he did nothing.
Will the raise affect quality of work?
Although it is already known, I would like to remind everyone that the State President’s wage will increase from EUR 6 260 to EUR 7 962 (+27%), the Saeima speaker’s wage will increase from EUR 4 565 to EUR 7 962 (+75%), the Prime Minister’s wage will increase from EUR 5 216 to EUR 7 962 (+53%), Saeima deputies’ wages will increase from EUR 2 963 to EUR 3 981 (+34%), ministers’ wages will increase from EUR 4 952 to EUR 7 052 (+42%), parliamentary secretaries’ wages will increase from EUR 3 841 to EUR 6 256 (+63%).
Leaders of local governments are in the loop as well
For example, the wage of Mayor of Riga Mārtiņš Staķis will increase from EUR 3 851 to EUR 6 415. Wages of Riga’s vice-mayors will increase from EUR 3 386 to EUR 5 346. Heads of Riga City Council committees will increase from EUR 2 698 to EUR 3 469. Other members of the city council have no reasons to complain – their wages will increase from EUR 1 270 to EUR 1 934. Mayors of other cities are paid four to five thousand euros as well – no reason to complain.
But there is no point in counting other people’s money or pour salt over the wounds of state administration in general. It will be interesting to observe how and if raises correlate with the overall quality of Latvia’s government. Unless voters suffer another blank in their memory, Latvian residents will be able to rate the quality of work after wage increase in local and state government during the upcoming municipal elections of 2025. Then residents will be able to see how much higher wages will have affected regional roads, the unending appetite of municipal LLCs and capital associations, accessibility of kindergartens and many other important factors.
Wage reforms in Lithuania and Estonia
Latvia is not the only Baltic country in which the wage rise for top officials and politicians has caused a stir among residents. Lithuania’s state sector will soon experience a wage reform. However, unlike Latvia, Lithuania has decided to review wages gradually starting from 2025. The process will start with justice institutions and judges, followed by workers of state institutions, workers of civil services. Politicians are the last in line. At the same time, not everyone in Lithuania is happy with the wage reform. It is highly likely discussions will prove heated, to say the least, mostly because there are concerns about certain articles of the reform may not comply with Lithuania’s Constitution.
Nevertheless, because
politicians and top brass is general are the last to receive their portion,
it does provide some room for respect.
Estonia is far from calm when it comes to the topic of wage increase for the country’s top officials. This country’s legislation states that wages of senior officials of state civil services, including the president, PM, chairman of the Estonian parliament and the Supreme Court are to be increased in April every year in accordance to the increase in the share of social tax pension insurance in the previous year. This composes 80% of officials’ wage growth. Price growth or inflation – composes the remaining 20%.
Estonians generally believe wage increase of state officials in a time of inflation, electricity, gas and heating price rise should be slowed. Officials, however, similarly to Latvia, wave their hands and say there is nothing they can do, as the law that governs it was passed by the previous parliament. Basically they propose directing all blame of the «players who are out of the game».
But if the redaction of the law in question has been in force in Estonia since 2009, Latvian parliamentarians decided to take care of their colleagues only around November 2019, when the parliament urgently passed amendments to the Law on Remuneration of Officials and Employees of State and Local Government Authorities. It is entirely possible that at least some were convinced the 14th Saeima would not make it without them (nearly all members of the coalition voted in favour of this).
But while residents wait for «horizontal initiatives», some may migrate
Every time this happened the authors of legislation (State Chancellery in Latvia) insist that without adequate and competitive pay it will be difficult to attract professionals to work in state administration. This is why, according to them, the goal of amendments is ensuring the wages of people employed in state institutions is equal to at least 80% of wages of people employed in the private sector.
If this is the case, this objective still has not been reached. While Latvia patiently waits for Mr. Citskovksis’ aforementioned «horizontal initiatives», at least part of professional and most competent officials will have likely migrated to the private sector. Because there is no money to raise officials’ wages! Ministries have to find the money in order to reach at least the minimal threshold within the next five years.
Do people actually believe ministries have some «secret stashes» they can empty to cover missing finances? As for where the money to increase officials’ wages was found, it should be no surprise the default explanation to cover up this embarrassment is that it is highly important to raise officials wages.
It is curious to know what Latvia’s top brass will do when they find out to their surprise that the corridors of the government become empty in the end? Because unlike PM Kariņš, who, according to his income declaration, owns shares in various US companies worth USD 22 846.24, savings in banks in Latvia and abroad worth EUR 132 900.66 and USD 172 476.97, and pension savings worth USD 197 166.46 in Morgan Stanley Bank, most people employed in state administration don’t have a safety pillow of that size.
At the same time, Kariņš’s savings seem rather modest when compared with President Egils Levits, who has savings worth EUR 473 671 in banks in Latvia and Luxembourg, as well as EUR 1 080 634 in six investment funds. So do Latvia’s top brass really need that wage increase, since even though living expenses have increased catastrophically, people are reluctant to let go of their established comfort level.
Also read: Riga City Council decides to increase wages for the mayor, vice-mayors and all deputies