Widespread protest at government plan to reduce inflation

In March 2007, the government adopted an action plan to reduce the country’s inflation. This resulted in contradictory actions with regard to salaries. In several fields of the public sector, employee protests have taken place opposing the government’s plan to freeze salaries, while in other areas of the public sector, salaries have been increased before the plan is implemented.

On 6 March 2007, the Latvian government adopted an action plan in an effort to reduce the country’s rate of inflation. The inflation reduction plan stipulates that salaries of public-sector employees are not to be further increased, except for representatives of specific professions (for which agreements have already been signed). Prior to these measures, the government had, by way of exception, increased salaries for a number of public-sector employee categories. Some of these pay rises, for instance in the field of culture, were the result of pre-election promises made by the winners of the parliamentary election in 2006. Other salary increases, such as those for employees in the police and fire services, are the result of extended industrial action (LV0610029I), where the trade unions played a significant role in securing the pay increase. As a result, salary increases across the public sector differ substantially between professions. This situation has caused protests from the employees concerned.

Social workers demand salary increase

The salaries of social workers are the responsibility of local authorities. To date, these salaries remain extremely low. Immediately after the adoption of the inflation reduction plan, social workers in the capital Riga complained about their salaries which they consider unfair in comparison with other salaries paid in the public sector. The Mayor of Riga, Jānis Birks, responded that he and his coalition partners supported the demands of the capital’s social workers. Following on from this, a proposal for a 20% salary increase for the employees in social care was submitted to the Riga City Council (Rīgas Dome, RD). The RD stated that the 2006 salary reform for municipal workers was unfair towards the municipal social workers, library workers and employees in education: the salaries of these employees remained unchanged, while those of other public-sector employees were raised.

Despite the promise made by RD officials in the press, the Latvian Health and Social Worker Trade Union (Latvijas Veselības un sociālās aprūpes darbinieku arodbiedrība, LVSDA) organised a picket on 8 March 2007. About 70 social care workers gathered in front of Riga City Hall, calling for a 20% salary increase and for improvements in their working conditions. RD officials met the protestors and, once again, stated that from May 2007, the social workers’ salaries would be increased by 20%; moreover, this would not be the last increase. LVSDA, however, warned that social workers would take industrial action if the RD did not satisfy their demands for a salary increase and improved working conditions.

Latvia has about 900 social workers, and a third of these are trade union members. The chair of the LVSD, Valdis Keris, has outlined survey findings that indicate that some 98% of employees in the social care sector in Riga are women; around half of these are the main breadwinners in their families.

Ministers receive salary increase

Following the announcement of a pay freeze for public-sector employees as part of the inflation reduction plan, the government declared its intention to raise the salaries of the prime minister, other government ministers and members of parliament (MPs), who are all civil servants. The salaries of government officials are related to the wage structure of public-sector employees: when looking at available data, it appears that salaries of public-sector employees increased by 23%, which corresponds to the pay rise for MPs and ministers. With this increase, an MP will earn a monthly salary of €1,600, the prime minister €4,445 and government ministers €3,995, while the public-sector salary was, on average, €490 in the third quarter of 2006.

At that time, before the wage increase, the salary of civil servants was 22% higher than the average salary of public-sector employees and 38% higher than the average national wage. Despite Prime Minister Aigars Kalvītis’ declaration not to go ahead with the planned salary increase for government officials, the parliament decided to proceed with the wage increase as stipulated by law.

Commentary

The government’s rather contradictory actions in terms of wage policy have not been widely discussed by the public to date. The ministers and prime minister’s salary increase is stipulated by law and cannot be changed.

Nevertheless, salaries in the public sector remain unbalanced across the different professions. Some public-sector employees have benefited from a salary increase, while others are still waiting for their increase. Thus, industrial action might be taken by public-sector employees in different areas (LV0703019I).

Raita Karnite, Institute of Economics, Latvian Academy of Sciences

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