The average wage in Lithuanian was 6.9% higher in the first quarter of 2016 than the same period last year.
This is the fastest rate of growth in pay packets since the Lithuania‘s economic recovery began in 2011 and is being driven by both the increased minimum monthly wage but also by labour market conditions which are favourable to employees.
Over the past 12 months the minimum wage has been raised twice: in the middle of 2015 and at the beginning of 2016 and by €25 both times. The minimum wage now stands at €350 which is 16.7% higher than a year ago.
The other key driver influencing rapid wage growth is labour market conditions favourable to employees. Lithuania‘s unemployment rate was 7.9% in the first quarter of 2016 with the unemployment rate among highly qualified professionals just 2.0% according to the Bank of Lithuania,.
In order to retain existing employees and recruit new ones, companies are being forced to raise salaire. Demand for new employees is quite high, while labour shortages persist. The existence of improved employment opportunities are also allowing employees to negotiate higher wages.
This combined with the increase in the minimum monthly wage is driving growth in pay packets in Lithuania.