The income of 21.7% of Latvian households has decreased in the last twelve months and for 18.5% households income has increased.
Negative and positive changes with income of Latvian households were observed more clearly in cities these past twelve months – 20.2% of city-based households mentioned their income has increased (14.3% in the countryside), 23.2% of households in cities and 18% in the countryside said their income has gone down.
The situation is distinctly different among households in Riga – 26.1% mentioned an increase of income, whereas 28% mentioned a drop, according to the latest data from the survey on income and quality of life done by Central Statistical Bureau of Latvia.
When asked what they expected in the next 12 months, 76.6% of households said they did not expect their income to change, 16.7% said their income would increase and only 6.8% expect their income to suffer a drop. Between households living in cities and the countryside there are some differences – 19% of households in cities (27.2% in Riga) and only 11.1% of households in the countryside expect their income to increase in the next 12 months.
74.2% of households in cities (65.1% in Riga) and 82.3% in the countryside believe their income will stay the same.
56.1% of households that said their income dropped in the last 12 months also mentioned that the main reason was shortened work hours, reduced wage or a drop in self-employment due to reasons outside their control.
29.1% of households mentioned loss of work, unemployment or bankruptcy of their enterprise as the main reason for reduced income.
As for situations with income of households has increased, 55.3% of respondents said the reason was that it was due to an uptake in social benefits, which could be explained with Latvia’s efforts to support children and seniors during Covid-19 pandemic. Most residents who provided this response are lonely seniors 65 or older, as well as low wage receiving households (first income quintile group – 69% and second income quintile group – 68.2%).
The second and third reason for the increase of income, according to households, was indexation of wages (15.6%) and extended work hours/increased wages (at the same job) (11.5%). (BNN/Business World Magazine)