Lithuanians discussed what kind of salary would satisfy them: "It is impossible to survive on current salaries"

"The government agreed that next year the minimum monthly wage (MMA) should increase to 924 euros before taxes, although residents believe that the MMA should reach at least 1 thousand. euros "in hand". At the time, some economists pointed out that it would be too bold to increase salaries from next year, as the economy has not yet recovered.

 

  Annual inflation in Lithuania for the first time since 2021 decreased to a single digit number and amounts to just over 8 percent. According to economist Aleksandr Izgorodin, such a change was caused by falling electricity and gas prices, which are now much lower compared to the end of last year. They also affect the prices of goods and services - these also decrease somewhat. However, residents say that it is still difficult to survive.

 

Now the MMA amounts to 840 euros before taxes or 633 euros after taxes, however, those interviewed on the street believe that the minimum wage should be almost twice as much. "Everything is getting more expensive, it is impossible to survive on the current wages, at least 1,000 euros would be needed," said the man. "The minimum salary should be at least 1 thousand euros, if we compare with abroad. And here the working conditions are different - a person works more, receives less", said another passer-by interviewed by "Lietuvos ryto" TV. 1 thousand euros and another passer-by found it to be the right amount: "Survival is difficult. Elderly people have to pay for medicines and doctors, people and an apartment. Everything needs money."

 

The government agreed that the MMA would increase by 10 percent, and the non-taxable amount of income (NPD) by 20 percent. Therefore, the minimum wage from next year would amount to 924 euros before taxes or 709 euros "in hand". 

 

The Bank of Lithuania previously offered to increase the minimum wage to 953 euros, but Finance Minister Gintarė Skaistė says that a higher wage increase was not considered keeping in mind the economic slowdown. "Assessing the state of the economic cycle, the uncertainty and the fact that the economy slowed down both at the end of last year and at the beginning of this year, a combination of two solutions was proposed - to increase NPD more and to allow income to grow more than 10 percent, which would happen with an increase in MMA alone," she said.

 

As Simonas Krėpšta, a member of the board of the Bank of Lithuania, mentioned, NPD is not far from the amount calculated by the Bank of Lithuania. From a macroeconomic point of view, this size of NPD will provide an impetus to increase the average wage, but will not put too much pressure on companies to cut jobs.

 

However, A. Izgorodin is skeptical about the increase in MMA. "Such a percentage doesn't seem technical to me, it's a big enough increase considering that both exporting and domestic companies are seeing a drop in orders. In addition, interest rates have also risen," he commented. According to the economist, increasing the MMA would mean an additional burden and difficulties for small and medium-sized companies that work in the regions. "Raising the minimum monthly wage now would be quite risky. Perhaps we should wait until the economic situation in Lithuania stabilizes and the economy begins to recover", A. Izgorodinas thought. About 109,000 people in Lithuania receive minimum or lower wages."