Meņģelsone urges a second look at minimum wage increase and its budget impact

Raising Latvia's minimum wage could put additional pressure on state and municipal budgets, as well as on pay in sectors where employees carry greater responsibility and need higher qualifications. That was the view of Līga Meņģelsone, a member of the 15th Saeima (Latvia's parliament) for the Unified List party, who spoke on the TV24 programme “Ziņu top”. She is also president of the Latvian Red Cross and a member of the council of Riga Stradiņš University. She urged that the plan be carefully reassessed.

Impact on sectors

Meņģelsone said a higher minimum wage sounds good in itself, but it is important to consider not only the increase but also its effect on average pay and on different sectors. She said this matters most in areas already short of staff, such as healthcare.

As an example, she named nurses and nurses' assistants, whose work involves a great deal of responsibility. In her view, a higher minimum wage may narrow the gap between lower-paid workers and specialists with considerably greater duties and responsibility. That in turn would create pressure to review the pay of other employees as well.

Budget capacity

The lawmaker also called for attention to how a wage increase would affect state and municipal budgets and whether public institutions can cover the extra costs. If no additional funding is allocated for this purpose, institutions and municipalities would have to find the money within their own budgets, which could affect other planned measures.

Meņģelsone stressed that she does not oppose raising the minimum wage, but wants the issue reassessed with both pay relations across sectors and financial capacity in mind. In her opinion, the decision on the plan could also be left to the next government.