On a growth course with low wages

On a growth course with low wages

by Udo Bongartz*

In the EU, Latvia is regarded as a model pupil, showing southern Europeans how to master crises. But the national budget savings are missing in the social sector, and Latvian workers prefer seeking their fortune in foreign countries.
The train station of Liepaja could pass as the setting of Dürrenmatt’s “Güllen”. That place had also seen better days before the old lady arrived. The vengeful billionaire had to pull the emergency brake to even get off the train. But the western Latvian harbour city is the final destination anyway. The historical building seems to be built far too big for its purpose. A passenger train to Riga is scheduled only twice a week. Traffic has shifted to the forecourt and has changed the train station into a bus station. From here, modern travel buses leave for the capital.
Liepaja officially has a population of 76,000 people – estimations are even lower. In 1989, the population was still at 115,000, including the Soviet soldiers in the war port quarter. Since their withdrawal, numbers have decreased. Nowadays, Liepaja could be promoted as Europe’s smallest big city. A little still remains of all its big city traits. The city tram consists of one single line. Its tracks make their way from the steel factory, which is about to close down, through the inner city down to the Eastern Sea shore. In times when Liepaja was governed from Moscow, the city was prohibited for tourists. Today, it is opened to the world again and offers the visitor an appealing mixture of dark brown wooden houses and stone facades. But the splendour is fading. The sign “Pardod” – for sale – is stuck to nailed-up windows. At the edge of town, the big empty factory halls from Soviet times outline the horizon.
Priest Martinš Urdze and his colleagues take care of the socially disadvantaged, unemployed and invalid.  When asked what poverty means in Latvia, the head of the diaconical centre in Liepaja invites me to the old city house of the deaconry, where he has established a refuge for the losers of the Latvian success story.

Low wage level

Steep stairs lead to a dark hallway on the first floor, where the rooms have been renovated with bright colours. The meeting room appears like a sitting room, with plants and an old couch. The chimney breast exudes warmth, as everything is still heated with wood around here. The Holy Cross hangs on the wall beside a portrait of Luther. Here we meet five female Sunday teachers. The women have a solid education. They work as kindergarteners, scientific assistants, grocery controllers or printery employees. In other countries jobs like these would enable them to get by very nicely with their income, but Latvia skimps on its employees’ salaries. These women need several jobs to feed their families.
The printing house employee Ilze worked for a private company until recently. But she was dismissed as the Russian crisis led to job shortages in Latvia. She will receive unemployment support for nine months from that date on, and if she does not get a new job during or after that period of time, her relatives will have to step in. In spite of their own problems the women take care of fourty children each Sunday. The 14- to 16-year old children come from the adjacent quarters. Here, they play, learn, tinker and eat together. The meals that teacher Ingrida prepares are tempting. The children are not starving, but they really love to eat here. At home, their parents mostly have no time, since many of them struggle to make ends meet although they hold down several jobs at once.
The percentage of low wage earners is higher among the employees in Latvia than anywhere in the EU. About 25% of the employees are just earning the minimum wage, which was raised to 360 euros by the government at the beginning of this year.
This is not enough to support a family. After years of inflation, the Latvian price level is nearly that of other western European countries. Most of the children only know cheap convenience food. The children whose parents work in foreign countries live with their grandmothers, who are unable to cope with round the clock child care.

Modest benefits

The diaconal centre also takes care of people who have to shape their life with a low income as a result of disability. They meet daily at the centre, where they manufacture gifts for the in-house Domino business or just spend time together.  At a breakfast gathering in the small hall of the ground floor, unemployed and handicapped readily give an account of their situation. The lack of fairly paid work is their main problem. They cope by means of seasonal work and are dependent on government support. The social welfare offices ensure their survival, but they do not allow for an independent life. Janis, a slender, wiry man in his mid-thirties, was unable to find a permanent place as a cook’s assistant, and then a      partial disability supervened. Now he lives in a boarding house financed by the city of Liepaja. He receives his monthly income of 128 euros from the state. This must suffice to cover his living expenses. He cannot even think of a car or a vacation, an apartment or the start of a family. Only the occasional trips offered by the diaconal centre or some free events organized by the city of Liepaja for destitute citizens provide a diversion.

Difficult decisions

Zigrida uses a crutch to drag himself to a chair. She has been attested a 100 percent disability, therefore she is partially exempt from medical fees. But the co-payments for consultation rates and medication weigh heavy on her monthly 450-euro budget, which she also uses to help her children and grandchildren make it through life. In Latvia basic medical care is guaranteed, and in acute emergencies even surgeons treat their patients at state expense. But much of what is medically necessary must be paid out of pocket. But co-payments quickly exceed low-income patients’ means, who therefore shun fee-based visits to the doctor. The breakfast group reports cases of pensioners who had to choose between buying food in the supermarket or drugs in the pharmacy with their meager income.
In the afternoon Martinš takes me to Aizpute, which is situated 40 kilometers further inland, with his small car. The tranquil village lies between meadows and forests. Hardly anyone can be seen on the road, only here and there someone is working in the garden. It is deathly silent. One would not like to call the place bus station where hardly ever a bus stops. Only massive concrete piers soar futilely as a remnant of the former shelter for waiting passengers. Some construction vehicles are parked on private ground. Road construction provides a few jobs.
We stop in front of a one-storey villa. The wooden facade is new, only the last planks are still missing under the roof. 30-year-old Margita greets us. She lives between scantily washed walls and worn furniture. Her two children are at school. Three years ago, she returned to her home country full of confidence. She hoped life in a foreign country would have been temporary, and that she would be able to risk a new beginning with the money saved. Her husband works in Peterborough in Britain and sends money, as she would not be able to live on the 33 euros child support granted to her monthly by the municipality of Aizpute. She has already worked in several jobs as a shop assistant, cashier or office worker. But now her situation seems hopeless. It is particularly difficult for her, because being a returnee she is regarded as a stranger. And if you want a job you need connections. Actually, the young woman is a country girl and hates the bustle of the big city. But now she is considering to move back to be with her husband in Peterborough, where already many Latvians live. The exodus continues, Latvian population fell below the two million mark in 2015.

No prospects

In the international arena, the Latvian government is shining with high performance figures. The country is back on track after the severe 2009 recession. But the beauty of the economic data does not alter the prospects. The success story propagated by the government sounds satirical to the unemployed. The breakfast gathering at the diaconical centre made a video in which they quoted the ministers who dismiss Latvia relative poverty as a luxury problem: Not everyone was able to go on vacation twice a year. Karina, an employee of diaconical centre, regrets that her compatriots are too well-behaved. The Latvians lack the spirit to protest as the Greeks do, she says.     •
*    Udo Bongartz is a guest lecturer at the Latvian Academy of Culture in Riga and editor at the online magazine Lettische Presseschau (Daily Press Review)

Source: Eine Welt, No. 3/2015 SDC (The Journal of the SDC is available for free.)

(Translation Current Concerns)

Latvia in brief

Name

Latvia

Capital

Riga

Area

64 573 km2

Inhabitants

1,995 Millionen

Languages

Latvian (official language) 53%
Russian 34%
Others 13%

Live expectancy

women 79 Jahre

men 68 Jahre

Migration

2,3 Auswanderer auf

1000 Personen (2014)

Economy

Latvia’s economy is highly export-oriented – its most important sectors are timber industry and agriculture, food production, machinery- and high-tech industry, electrical industry.

Poverty

By the end of 2014, the unemployment rate was at 10% and is slightly below the EU average. However, Latvia had the highest proportion of low-paid workers among the employees with nearly 28% throughout the EU in 2010; despite economic growth more than one third of the Latvian population is at risk of  poverty and social exclusion.

The Baltic States

The Baltic states are the three countries in northern Europe on the eastern coast of the Baltic Sea Estonia, Latvia and Lithuania; they border Russia, Belarus and Poland. In August 1989, the Balts demonstrated with a human chain 600 km in length for the independence of their countries, which they achieved in spring 1990 – against the resistance of Moscow. Thereafter the three small states experienced a rapid boom. In 2004, they joined the EU and NATO. In the course of the financial crisis a heavy economic slump followed. Latvia plunged into the deepest recession within the EU, from which the country recovered only slowly. In 2014, Latvia and Estonia adopted the Euro, followed by Lithuania in 2015.

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