Linas Jegelevičius
Sodra, Lithuania’s state social insurance fund, has announced that the average salary of fully employed persons in the third quarter of the year reached 1 989 euros before the deduction of taxes, or 1 235 euros “in hand.” Considering inflation which hovered in single digits in the second half-year, the real growth of labour income stood at about seven percent in the quarter, up by 12% from a year ago, Kristina Zitikytė, adviser of the Statistics, Analysis and Forecasting Department of Sodra, says.
However, many hear the numbers with a jaundiced eye.
“Every time, when someone speaks about the average salary, I hear quite different numbers. They obviously depend on the source who you are talking to and the different criteria. When I speak to ordinary people, I hear increasingly more complaints about rising livelihood costs,” Dainius Kepenis, a Lithuanian opposition MP from the Farmers and Greens Union, told BNN.
Meanwhile, some of the “ordinary people”,
like Daiva Jasiūnienė, a dweller of Varėna, a six-thousand inhabitant town in southern Lithuania, who ekes out a couple hundred of euros as a taxi driver in addition to being owner of a small store, laughs off the statistics: “Oh, stop telling me jokes! Here in Varėna, around 80% get by the official minimum (840 euros in 2023 before tax deduction, 633 “in hand”). Those who receive over one thousand (euros) work in the municipality, also the doctors in the hospital and some of the teachers,” she told BNN confidently.
However, Sodra insists that with “in hand” salary amounting to 1 235 euros in the third quarter, the yearly growth constituted 12%, or 119 euros.
According to Sodra, in the quarter, the labour income of seven out of ten employees increased, two out of ten did not see any significant change and for one out of ten income have decreased.
When it comes to economic sectors, the fastest growth of labour income was recorded in construction sector, where labour income increased by 19 %, or 140 euros.
However, to tell the truth, the country’s construction sector remains one of the least transparent, one in which paying (wages) off the books is ripe.
“In our construction site, nearly one-third of the blue-collar workers are migrants,
some of whom are in the midst of obtaining their work permits or do not have them at all. I myself am contesting the Lithuanian Migration Department’s ruling obligating me to leave the country. Officially, I cannot work here, but I have no choice – I am happy to have found an employer who gave me the job, paying off the books. Certainly, a Lithuanian construction worker would never agree to work for the wage I am receiving,” Aram, an asylum seeker from Armenia, told BNN.
Environment Minister Simon Gentvilas has also said that “shadow” is still a sensitive problem in the country’s construction sector.
“We see troubling data from the State Revenue Inspectorate that the construction sector is still half “in the shadows”. It is strange to see, but the average wage in construction sector is lower than the national wage; statistically, one-seventh of those working in construction earn less than the minimum wage. This is a clear proof that the “shadow” is widely flourishing,” the minister emphasized recently.
Statistically, salaries also increased for those working in administrative and service activities – by 16% in average.
According to K. Zitikytė, in finance and insurance sectors, labour income increased by about 14% and “in hand” reached about 1 700 euros in the third quarter of the year.
Lithuania’s total workforce comprised of 1.35 million workers in the third quarter, and the numbers continued to decrease only in two sectors – trade and processing industry, Sodra said. For example, in furniture and wood production, the number of employees decreased by about 10%.
The agency said that, at the beginning of the year, the number of unemployment benefit recipients went up by about 14% compared to last year. There were 78 thousand recipients of unemployment benefit on the 1st of November, according to Sodra.
“This increase was across all age groups but was greatest among the youngest participants in the labour market – those under 30. People working in manufacturing, wholesale and retail trade, accommodation and catering, and administrative and service activities have joined the ranks of unemployment benefit recipients” K. Zitikytė pointed out.
Most unemployment benefit recipients live in the Zarasai, Ignalina, Raseiniai, Rokiškis districts.
The Sodra representative also noted that the gap between the highest and lowest earners is narrowing.
“This was due to a rapid increase in the minimum monthly wage. The wages of those who earn the lowest income increased by 14% during the year, and those who earn the most – by 10%. This led to the decreasing, but the amounts “in hand” are different,” the representative said.
However, when compared to other EU countries, Lithuania cannot boast of this indicator – a larger gap between the highest and lowest incomes is recorded only in Bulgaria and Romania.
Sodra also looked at the differences between men’s and women’s labour income. There is little good news on the front – the situation is changing slowly. According to the institution, men’s salaries in the third quarter were 14% higher than those of women. Men earned an average of 1 314 euros, women – 1 158 euros.
The differences between wages in the capital city, Vilnius, and in the regions also remain steep – the average salary in Vilnius is approximately 43% higher than in regions. In September, the average salary in Vilnius was 2 291 euros, and in the rest of the municipalities it was 1 602 euros on average before taxes. The difference “in hand” is 377 euros.
According to Sodra, the gap is influenced by both demographic and economic reasons – people of working age leave the regions for Vilnius in search of better wages, while those who would like to stay in the provinces face a lack of jobs.
Among the other interesting trends is an increase of multimillionaires in the country.
Magazine TOP has recently announced that Lithuania has three new billionaires: Tomas Okmanas and Eimantas Sabaliauskas, co-founders of Tesonet, as well as Darius Mockus, the president of MG Grupė.
According to the magazine, Lithuania’s richest man in 2023 was Gediminas Žiemelis, chairman of the board of Avia Solutions Group, whose assets are worth 2.45 billion euros. He was Lithuania’s richest man in 2022, too.
The Lithuanian Center for Social Research has also observed a growing concentration of capital in the richest strata of the country’s population, however some analysts warned that the shaping middle class may have suffered recently.