Author: Ilona Bērziņa
Minister of Welfare Reinis Uzulnieks (ZZS) identifies his top priorities as demography, employment, and improving the quality of life for seniors—issues that are deeply linked to pension indexation and the planned introduction of a basic pension in the future. An equally important question is how to encourage the return of Latvians who have moved abroad. Although the situation is no longer as dramatic as a few years ago, it is still far from satisfactory. BNN discusses these and other issues in an interview with the Minister.
You’ve stated that you’d like to pay more attention to employment issues. However, the situation is somewhat paradoxical. According to the Central Statistical Bureau, the actual unemployment rate in Latvia was 7.5% in February, yet entrepreneurs complain that there’s no one to work. How can this be addressed?
Employment is one of my priorities, which is why I regularly meet with the director of the State Employment Agency. I believe we have enough workforce in the country, but these people need to be retrained to meet employer requirements. While traveling through regions, I always meet with entrepreneurs to understand their needs and what kind of specialists are required. Through regular contact with the Employment Agency, we can identify what training, courses, or retraining is needed. For example, 12 500 summer job vacancies for youth have already been created, and they are typically filled. We have enough people to meet employer needs—it’s a matter of preparing workers with the right qualifications.
However, there’s public opinion that even though the agency’s training programs are good, they don’t help people find decently paid jobs.
That’s a myth—that only gardeners and florists are trained, although those are important and necessary professions. We also train workers in high-value-added professions. That’s why I meet with employers to tailor the training courses to their needs. If people say they can’t find suitable jobs after completing the agency’s training, it might be that they weren’t suitable for specific employers. We’ll continue to monitor the situation to ensure both sides benefit—employers and employees.
Job seekers often say they would work, but the minimum wage offered doesn’t provide a decent living.
We need to find a balance between expectations and skills, so both sides are satisfied. The agency also organizes events like job fairs, where employers and job seekers meet face-to-face. The most recent was focused on the tourism industry—dozens of employers and plenty of job seekers met, and many could connect right there. We’ll continue these activities throughout Latvia.
Employment is especially difficult for people with disabilities. How do you plan to address this issue?
Unfortunately, many people with disabilities are long-term unemployed. However, there are already subsidized jobs where employers are supported in adapting the work environment. We’ve discussed launching a pilot project with the largest NGOs representing the interests of disabled people – Apeirons and Sustento, where NGOs would help facilitate employment for people with special needs. Currently, the job agency has a program for this, but it lasts only three months, after which employers can decline to retain the employee. Our goal is to create incentives for employers to keep these workers longer. Businesses have expressed interest but need state support and mentors—NGOs could serve in this mentoring role.
We also work with employers to explain that employing people with disabilities serves a social function. We have a social entrepreneurship program where businesses employing people with disabilities or solving social issues can receive grants from the financial institution Altum.
I’ve personally run a social enterprise that integrated people with visual and hearing impairments, so I understand both the seriousness of these challenges and the necessary steps to address them. It’s important to raise awareness: a person with a disability—especially a mental one—might not function like others, and this must be seen as a social responsibility. I believe our society is inclusive enough.
In Latvia, many seniors continue working after reaching retirement age. Some want to stay active, while others simply cannot survive on their pensions alone. When will Latvian pensioners be able to enjoy financially secure retirement and perhaps travel?
As you noted, there are two kinds of working pensioners. One, although receiving a good enough pension, does not want to drop out of the labour market and continues to work. These people are also generally well aware that being in society allows them to prolong their life expectancy and maintains their quality of life. Then there is the other part who work because their income is unfortunately relatively low.
The positive news is that we resumed granting supplementary payments for insurance periods accumulated before 1996. This means those who retired between 2012 and 2028 will receive additional payments—around 144 000 pensioners next year.
Also, the tax-free minimum for pensioners was doubled from 500 to 1 000 euros this year, and working pensioners can split this—500 euros applied to the pension and 500 euros to the salary. Another good development is that from the 1st of October this year, pensions will be indexed in full based on last year’s average insured income—about 1 500 euros.
It’s clear that in the future, there will be fewer working-age people, meaning the income replacement rate will decline. Introducing a basic pension will help balance this. Then all tools will be in place—what remains are health and digitalization.
The basic pension is scheduled for 2029, but senior NGOs argue that it should start earlier, starting from 2026, at least for those aged 80+. Is that realistic?
I’ve discussed this with both the Pensioners’ Federation and the Association of Senior Communities. I don’t yet know the exact number of people over 80 or 85 in Latvia, but the costs will clearly be substantial. National security is the state’s top priority, and I see demography as the second.
From 2029, basic pensions will definitely be introduced, but I can’t yet say whether they can be provided earlier for those aged 80+. I’ve requested calculations, but payments won’t start in 2026. In autumn, based on the budget, I’ll push forward the ministry’s priorities: demography, employment, and support for seniors—including the basic pension.
If not from age 80, perhaps from 85 as a compromise?
On a human level, I agree with you, but in welfare, every euro moved around costs millions…
Currently, everyone working in Latvia must join the second pension pillar. Estonia made participation voluntary four years ago, even allowing people to withdraw their funds. Last year, a similar idea was floated in Latvia too. Mainly because people have heard that money invested in pension funds does not make money. What’s your take?
Estonia has realized that allowing voluntary withdrawal of pension funds was a mistake. A moment of weakness led to the destruction of savings meant for the future. Looking at returns, the average yield of Latvia’s second pension pillar from 2010 to 2023 was about 12% annually. Plus, everyone can choose their fund manager and investment plan. We’ve made sure participants are better informed, and managers must provide individual advice.
We’ve also proposed allowing second-pillar participants to transfer funds to the first pillar before retirement. These discussions are ongoing. I care that when seniors retire, they have a maximum saving and pension factor. I would like to see every individual have as high a pension as possible.
Our system is built for the long term—two mandatory pension levels and a voluntary third level, where people can save and later withdraw funds. It’s similar to how health insurance can be privately funded.
One of your main goals is tackling the demographic crisis. Last year, there were 13.2% fewer births compared to 2023. What can be done to stop this? Does the Welfare Ministry have a plan?
Over the past decade, the number of women of childbearing age has decreased by 88 000, reducing the potential number of births. Improving demographics requires a comprehensive approach, and for the first time, it’s being tackled across all 14 ministries, not just one. Each ministry submitted proposals for the demographic plan, which we compiled.
Can you give some examples?
First, housing is critical for young parents—here, the Ministry of Economics proposed rental housing projects and Altum’s involvement. Healthcare and positive first-birth experiences are equally important. Child benefits haven’t increased since 2003, so raising them is essential. One of my priorities is increasing childcare benefits from 171 to 420 euros, regardless of social contributions. Why 420 euros? That’s half the annual median income, and if the median rises, the benefit will too. I’ve prioritized revising and implementing all these benefits, which could cost around 150 million euros, but we must act to avoid steep population decline.
What about simpler measures, like free school meals up to 12th grade? Even small things could boost birth rates.
The state currently pays for meals in grades 1–4. We’ve proposed in the demographic plan that it would be good to provide one meal a day until Year 9. However, municipal programs vary—some offer free meals up to Year 9, others for families with 3+ children, and some for vulnerable groups. It varies.
What about Year 9 to Year 12? Teenagers are still dependent on parents, and free meals would help families, especially those with multiple kids.
As a father of three, I completely understand. These free meals are a huge support for many families.
You mentioned the drop in the number of young women. That means remigration must become a serious priority. But it still seems more people leave than return—despite the gap shrinking, the net migration balance remains negative (–1.5 thousand in 2023).
People will return if they feel secure—if they can get well-paid jobs, schools, kindergartens, and housing. If they feel they can have all that here, they’ll come back. The state must ensure economic stability and growth, so people want to live and raise families in Latvia.