The government’s priorities and responsibilities for 2020 and the ongoing debates about pay rises for workers in the healthcare and education sectors are the main topics of interest in this article. This country update reports on the latest developments in working life in Latvia in the third quarter of 2019.
The annual budget process began in mid-summer. Traditionally, the discussion about the state budget starts with an agreement between the government and social partners about the minimum wage. On 15 July 2019, the Latvian parliament’s committee for the development of taxes supported the idea that the minimum wage could be raised from the current €430 per month to €500 in 2020. However, when the government revealed its budget plans in September, the minimum wage increase was postponed until 2020.
On 27 August, the general terms of the state budget for 2020 were discussed in the National Tripartite Cooperation council (NTSP) meeting. Social partners welcomed several positive introductions to the budgeting practice, such as the commitment to leave the tax system unchanged, but also highlighted that they had only been nominally involved in the preparation of the budget (it was discussed among the government’s coalition partners, but not with the social partners).
The budget priorities were discussed in another NTSP meeting on 27 September. These priorities included increasing the budget for the healthcare and education sectors, public media, and financing measures to fulfil the requirements of the MONEYVAL report about the banking sector. [1]However, providing additional finance for the healthcare and education sectors would not be possible under the amount that was previously agreed for the 2020 budget.
The national level social partners had different reactions to the government’s proposal. While the Employers’ Confederation of Latvia (LDDK) agreed with the main statements, the Free Trade Union Confederation of Latvia (LBAS) did not support the proposal as a whole. The negative reaction of the trade unions was fuelled by the government’s announcement that promised pay increases in the healthcare and education sectors would not be possible.
In December 2018, the newly elected parliament supported the decision of the previous government to raise the wages of healthcare workers by 20% each year until 2021 and amended the Health Care Financing Law accordingly. [2] However, the rise was not introduced in the state budget for 2019, which was adopted in April 2019. The government said that this was due to the length of time it had taken to form a new government (almost four months) and the fact that the 2019 budget should be considered a ‘technical budget’, in which new ideas are presented.
In Q3 2019, the government started planning its financial priorities for 2020 and social partners highlighted the previously adopted pay rise amendment. The government stated that it was not possible to fulfil this law in its entirety due to a lack of money and that wages could potentially be raised by a maximum of 10%.
Out of the 14 current ministers, 9 voted for the amendment to the Health Care Financing Law when they were still deputies in parliament. Now they are seen as contradicting their previous decision.
In response to these developments, the Trade Union of Health and Social Care Employees of Latvia (LVSADA) sent a letter to Ināra Mūrniece, Speaker of the Saeima, and other deputies in parliament on 18 September. The trade union asked to avoid violation of a law regarding the financing of wages of healthcare workers in the current and following years. As of the end of Q3 2019, opposition deputies had answered this letter with a deputy claim where they asked Minister for Health Ilze Viņķele to explain the situation. [3]
The long-running dispute over wage increases in the education sector continued in Q3 2019. [4] While the government agreed to increase the minimum monthly wage of teachers to €750 in June (as of 1 September 2019), [5]the question of how to fund this increase – and further increases – remained under debate.
On 9 October, after it became clear that the wage increase had fallen behind schedule, the representative of the Latvian Trade Union of Education and Science Employees (LIZDA) spoke openly about the situation. Representative Inga Vanaga stated that the government was violating the law, although she also thanked the government for improving the financing of education and science to some degree. [6]
On 11 November, the state budget for 2020 is due to be submitted in parliament for further discussion and adoption. Several positive developments are expected, including: