Minimum Wage Set to Rise in Baltic States in 2018

During the past few years, there have been some positive improvements for raising the minimum wage in all three Baltic states (Estonia, Latvia, and Lithuania). In 2018 minimum wage is set to rise in all Baltic states again. Estonia will a have a minimum wage of EUR 500; Latvia - EUR 430 and Lithuania - EUR 400.

That' s a pretty decent leap if compared with 2016, when minimum wages were set at EUR 430 in Estonia, EUR 370 in Latvia and just EUR 350 in Lithuania. See: Minimum Wage Set to Rising in All Baltic States in 2016

Despite a pretty decent increase in the Baltic States, minimum wages here are still among the lowest in the European Union. See: What's Minimum Wage in European Union 2017

During the past years I've been closely monitoring minimum wage developments in the Baltic states, here are few articles from history:

Why do I care so much about minimum wages in the Baltic states? Simple, as I've been building dividend paying stock portfolio exclusively from the Baltic stock market (Nasdaq Baltics), one of mine goals is to reach a monthly dividend income level in the same level as a minimum wage.

Currently, I'm competing against Latvian minimum wage set at EUR 380 in 2017. Current best dividend income month has been July 2017, when I made just a bit above EUR 100. In general, when planning next years investments I must keep in mind this increase. Tough. But that's what I'm loving being a dividend growth investor  - a healthy competition. See: dividend income

If you are looking for EUR 500 dividend income monthly from the Nasdaq Baltics which would equal to the minimum wage in Estonia in 2018, you should invest in the local equity market about 50,000 - 70,000 EUR.

As my current net worth has just recently cracked $10,000, it could take me about 5-6 years to get there. But now I should forecast, what would be the minimum wage in 2022, in Latvia, for example. Looking through the historical increases over the years, I forecast minimum wage in Latvia in 2022 set at around EUR 580 (on average EUR 30 increase per year)

Now, knowing that, I should focus on EUR 580 monthly dividend income, to keep up with developments.

Why do I believe that minimum wage in Latvia in 2022 will be set at around EUR 580?

  • First of all, it should, existing minimum wage rates IMHO are way too low to compete in the global arena, sure it's great seeing a minimum wage increase to EUR 430 in 2018, but that shouldn't stop here. 
  • Second, about 2 years ago I forecasted minimum wage for Estonia in 2018 set at EUR 500, and here you go:

I forecast that by 2018 minimum wage in Estonia will be set at least EUR 500

Now, let's see will my forecasts about minimum wages will be true for Estonia and Lithuania for 2022 as well, here are my humble forecasts

  • Estonia: ~ EUR 675 
  • Lithuania: ~ EUR 525

A good read about a possible EUR 1,000 minimum monthly wage in Estonia, is published here: Agreement on Estonian minimal wage reached for 2018, I will publish just an excerpt here:

Among the Estonian politicians and businessmen, who have urged to introduce the minimum monthly salary of 1,000, there is former banker and Hansapank founder Indrek Neivelt and former Centre Party chairman Edgar Savisaar.

Now, what about you? Do you have any comment on minimum wage developments in the Baltic states? Do you use minimum wage as an indicator for your investments? Leave a comment, readers and I would love to hear!