Project activities in Latvia

Download a summary of the Latvian pilot project
First results of the Latvian pilot project

Latvian studies:
Changes in LV tax policy
Crisis in Latvia: how did we get there and how should we get over it
Self-employed workers versus employees: working conditions and social protection
Workers Newspaper
Analytical report: "Declaration of private person's assets"
Analytical report: "Latvian fiscal policy for 2011 and its possible consequences"
Analytical report: "The proposed consolidation measures for Latvian state budget in 2011"
Analytical report: "Shadow economy in Latvia"
Analytical report: “Legalization of undeclared private income”
Analytical report: “Euro Plus Pact”
Analytical report: “Inflation in Latvia”

Short overview of the labour market

The population of Latvia is approximately 2.2 million (2 261 300). Approximately 1.2 million (1 204 200) or 53.3% are economically active. 1.34 million or 59.2% of the total population are Latvian; 636 800 or 28% are Russian; the remainder represent other ethnic groups. Economic activity is mostly concentrated in Riga and the area around Riga. A little less than half of the Latvian population lives in Riga. A considerable proportion of the inhabitants of surrounding districts work in the capital city.

The Latvian labour market situation has been stable since 2001. The economic activity of the population has grown; the number of employed persons and the employment rate rose up; however, in the second half of 2008 the Latvian labour market situation deteriorated rapidly. This trend has continued at the beginning of 2009.

In the fourth quarter of 2008, the total working population was 1 085 600 (60.4% of the total population aged between 15 and 74). Only 4.9% of them did not work for one reason or another (vacation, illness, childcare leave, study). Compared with the corresponding period in the preceding year, the fourth quarter of 2008 saw a decrease both in the number of people employed (fourth quarter of 2007: 1 148 800) and the proportion of those employed in the total population (in the fourth quarter 2007, this indicator stood at 63.7%). The employment rate increased from 58.6% in 2001 to 68.3% in 2007.

The statistical level of registered unemployment has risen from 6.5% at the end of 2006 to 8.3% as of January 2009. Although in the first half of 2008 the level of registered unemployment was stable (from 4.8% to 5.1%), in the second half of 2008 and in particular in the fourth quarter of 2008 it rose very quickly. One should take into consideration that the employment and unemployment situation differs significantly from one region of Latvia to another. For example, the unemployment level is less than 7% (6.2% in January 2009) in Riga, while it exceeded 19% (19.4% in January 2009) in the district of Rezekne (in the eastern part of Latvia).

In the period between 2001 and 2005, gross domestic product increased by an average of 8.1% per year: 10.2% in 2005, 11.8% in 2006 and 9.3% in 2007. 2008 has seen a slowdown in economic growth, in particular at the close of 2008 (the gross domestic product decreased by 4.6% in the third quarter) which stems from the rapid pace of decline in several sectors of the industry (construction), as well as from a high rate of inflation. Very high levels of inflation are characteristic of Latvia, although it has gradually fallen in 2008, and in December of 2008 was 10.5% (Central Statistical Bureau (CSB)). In early 2009, inflation decreased again – in January 2009 it was 9.8%. In January 2009, consumer prices were 9.8% higher (including 8.9% for goods and 12.2% for services) than in January of the preceding year. For the sake of comparison, the rate of inflation in Latvia was 6.3% in June 2006, 6.8% in December 2006, and 8.8% in June 2007. Prices of consumer goods rose by 14.5%, whereas the cost of services increased by 15.9%. The occupations most in demand as of 1 February 2009 were ship repair machinists, gas welders, ship-building locksmiths and sales assistants-consultants.

According to the results of the Employers’ Survey carried out by the State Employment Agency in November/December 2008, employers plan to increase the number of employees in agriculture, forestry and fisheries and professional, scientific and technical services, and to decrease the number of employees in construction, art, entertainment and recreation, state administration and defence; statutory social insurance, with the least changes in the number of employees expected in the sector of financial activities and insurance. In general, the employment rate prognosis indicates that in 2009 the Latvian labour market will depend on and will be closely related to the internal economic situation. The forecast is that in 2009 the unemployment level will continue to grow, and a continued decrease in the number of vacancies is expected.

Migration
In 1990 there were more than 2,67 mil. Inhabitants in Latvia. After 1990 migration direction changed to opposite side. Intensity decrease and emigration increase. Balance of migration became negative and number of inhabitants only decrease.

Migration policy in Latvia is neutral (even conducive) to direction of emigration and limitative to immigration direction. For emigration there are just few abridgements in Latvia, but there are many laws that regulates arrival and stay for foreigners.

According limited policy in Latvia, bringing employee from abroad especially from 3rd countries costs for employers.

Statistical data about emigration amount and dynamic in Latvia are different in different sources. Real amount of emigration and intensity in Latvia is almost impossible to state. By data of Central Statistical Bureau (CSB) of Latvia in the period of year 2000 – 2008 from Latvia departed on average 4426 people a year, altogether departed 39841 people, but part of them came back to the Latvia. In its turn after year 2004, when many EU countries opened their labour markets, 20636 people departed Latvia on average 4127 a year – less than previous years. Though, flow of passenger transport to typical emigration goal countries coloured to numerous amount of emigration.

You will find researches that are different from those made by CSB but mostly data from different sources is not comparable and each of them gives evaluation from different point of view. One of well known researchers in Latvia Mr. Indans writes that January 2006 there were about 50 thousand employees that left Latvia but other researchers estimate that unofficial amount could be higher because many people departed from Latvia before Latvia entered EU. By Irish data to Ireland moved 14 thousand people from Latvia but for example researchers suppose that number could be 20 thousand. From other side, official statistics of Ireland evaluates that total amount of immigrants from EU-15 – EU-27 countries in year 2008 were about 38 thousand.

BSLN project
Project BSLN plays significant role in development of sustainable labour market in Latvia
Project activities will be implemented in close partnership between Employers’ Confederation of Latvia (LDDK) and Free Trade Union Confederation of Latvia (LBAS). Mobility of labour, active labour market policy, human resources development is the main working areas to carrying out the project within the collective process that needs active partnership that we’ve got in the BSLN project.

Shortly about project partner LBAS
Free Trade Union Confederation of Latvia (LBAS) is the biggest non-governmental organisation in Latvia, which protects the interests of professional trade union members and employees on the branch and inter-branch level.
LBAS coordinates the cooperation between 21 independent Latvian trade unions, represents and protects the interests of its members in national and international institutions, implements a joint working programme.
The purpose of LBAS activities is to protect the interests of trade union members. The main principle of operation is solidarity – joint coordinates actions of the affiliates. LBAS represents its members' interests and protects their rights in the socio economic field. Together with the government and Latvian Employers' Confederation LBAS works in the National Tripartite Cooperation Council. LBAS observes the principles of social dialogue in cooperation with the social partners. LBAS participates in the elaboration of economic and social development programmes, in the evaluation of draft laws, in working groups on improvement of labour conditions, salaries, tariff policies, compulsory social insurance and social guaranties, healthcare as well as employment, vocational education and lifelong learning.

LBAS represents the interests of its members in:

• National Tripartite Cooperation Council and its Sub-councils;
• State and municipal institutions;
• courts. LBAS provides consultations to the trade union members on concluding the collective agreements, participates in revision of labour disputes, social and economic discords. At present LBAS unites 15% of all workers of Latvia in almost 2900 state, municipal and private enterprises.

Shortly about project partner LDDK

• The biggest organization representing interests of employers
• Partner in socioeconomic negotiations with parliament, government and Free Trade Union Confederation of Latvia
• Unites 48 branch and regional employers’ organisations
• Unites 94 enterprises that employ over 50 people
• Members of the LDDK employ more than 33% of employees in Latvia

Areas of operations

• The LDDK has two areas of operations – defending the interests of businesspeople and representing employers in social dialogue. Protection of the interests of LDDK members represents organised activ- ities on the part of members of the business community in pursuit of better regulations and laws related to business operations. The involvement of the LDDK ensures that the decisions that are taken by the government are legitimate insofar as economic and social issues are concerned. The protection of interests shapes the foundations for rule of law and a democratic society in Latvia.
• Representation of the members of the LDDK shows that rights and obligations are being pursued, as stated in the laws which regulate the confederation’s operations. As the largest organisation of employers in Latvia, the LDDK must represent employers in social dialogue with the state and local governments, promoting social peace and welfare. The LDDK is also charged with consolidating the views of employers when it comes to issues that are of importance to them and to employees, promoting social partnership and representing employers in the institutional framework of tripartite activity.

Main project activities will be focused on 2 main issues:

1.Development of High-Quality and Available Human Capital
a) Development of human resources and their competence and skills
creating qualification assessment structures for the various sectors;
b) Development of a system of ongoing education and improvement of
qualifications in the various economic sectors, becoming part of lifelong
education action plans
c) Optimisation and greater effectiveness among institutions of
vocational education, bringing ESF and ERDF finances into the process so
as to develop infrastructure and educational content
d) System for the ongoing education of instructors at professional education
institutions in close work with employers and businesspeople
e) Competitiveness of higher education in Latvia and to ensure its
international recognisability by attracting students and instructors,
relaxing rules related to visas and residency permits

2.Employment
a) Reducing unemployment and preservation of existing jobs, enhancing
productivity and creation of new jobs
b) Programme on attracting workers in sectors having exports and
innovations potential
c) Strategy on employment and the professional and geographic mobility
d) Projects aimed at enhancing employment of job seekers with a higher
education, developing their entrepreneurial and business competence
e) Training programmes for unemployed people and job seekers to expand
the ability of individuals to find jobs, to provide for the professional
mobility
f) ESF financing for labour market forecasts, active development of
employment opportunities, adult education centres, educational
companies, qualification and examination centres for the various sectors
of the national economy

Useful links:
LBAS: www.lbas.lv
LDDK: www.lddk.lv
State Employment Agency of Latvia (NVA): www.nva.gov.lv