Abstract
The government of Lithuania actively increases the minimum wage in 2012–2014: in-one-and-a-half year period it increased by 22 percent – from 246 EUR (850 LTL) to 300 EUR (1035 LTL). It is promised to increase the minimum wage in 2015 as well. The amplification of the competitiveness of the economy is one of the main conditions of economic development. This is emphasized by economists, Lithuanian government, and European Commission. The core issues of the competitiveness of Lithuania are the energy sector and the labour market. Such statement is provided by the European Commission in the 2014 report on Industry competitiveness. Therefore, the aim of this article is to evaluate the economic and social consequences of the increased minimum wage and their impact on the competitiveness of the labour force. In the first part of the article, changes of the minimum wage and their economic and social consequences are analysed. In the rest part of the article, the impact of these consequences on the competitiveness is evaluated.
Highlights
In 2012–2014, the Lithuanian government undertook relatively radical changes in the minimum wage: in 2013 the minimum wage was increased by 150 LTL (43.44 EUR) – from 850 LTL (246.18 EUR) to 1000 LTL (289.62 EUR) and in October 2014 again by 35 LTL to 1035 LTL (300 EUR)
The aim of the research is to evaluate the social and economic consequences of MW increase from 850 to 1035 LTL in 2013–2014 on the labour market and its competitiveness, and to answer the question whether the further MW increase would lead to negative consequences
The analysis of the social consequences of MW increase revealed that in short-term the increase of the minimum wage to 1035 LTL (300 EUR) increased the wages of the employees who receive less than the MW, increased the revenue of the SODRA, did not reduce poverty and state budget expenditures on social support
Summary
In 2012–2014, the Lithuanian government undertook relatively radical changes in the minimum wage: in 2013 the minimum wage was increased by 150 LTL (43.44 EUR) – from 850 LTL (246.18 EUR) to 1000 LTL (289.62 EUR) and in October 2014 again by 35 LTL to 1035 LTL (300 EUR). Authorities in the Lithuanian Seimas and government promise the further increase of MMW to 325 EUR in July 2015. The increase or stabilization of the MMW depends on the prevailing opinions of governmental authorities, the activeness or popularity of professional unions, and support from society. The ruling social-democratic political parties are more likely to choose the increase of MW, while more liberalistic political parties emphasize the influence of economic growth on changes in the living standard. The aim of the research is to evaluate the social and economic consequences of MW increase from 850 to 1035 LTL in 2013–2014 on the labour market and its competitiveness, and to answer the question whether the further MW increase would lead to negative consequences
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
