Therefore, the most important question today is not only how much salaries will increase, but who will finance this growth and whether the higher number on the payslip will translate into a real improvement in living standards.
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Indicators of Lithuania’s economy and labor market look favorable in mid-2026. According to Eurostat estimates, Lithuania’s GDP in the second quarter was 3.8% higher than a year earlier, with the fastest growth rate among the fifteen EU countries. The EU economy grew by 1.2% over the year. Compared to the first quarter, Lithuania’s economy grew by 1.7%, while the EU average was 0.5%.
Wage statistics also remain positive. According to the Bank of Lithuania, in the first quarter of 2026, the average gross wage increased by 9.3% year-on-year. Growth in the public sector was 11.1%, and in the private sector – 8.5%. The Bank of Lithuania forecasts an average wage growth of 8.7% in 2026, 6.9% in 2027, and 7.2% in 2028. The Ministry of Finance scenario anticipates growth of 7.9%, 6.1%, and 5.7% respectively.
However, overall wage growth does not answer the most important question: for whom are wages growing fastest, for whom has growth almost stopped, and from what sources will companies finance rising labor costs?
Some employees’ incomes are raised by increases in the minimum monthly wage, others’ wages are determined by the state budget and collective agreements. The incomes of rare specialists are increased by international competition for skills. However, a large part of private sector employees remain dependent on the sales, productivity, and profitability of their specific company.
Hides different labor markets
The average wage is an important macroeconomic indicator, but it is influenced by the incomes of all employees, including very high salaries. The median shows something different – the wage level of the employee in the middle. Therefore, when assessing the position of a typical employee, these indicators cannot be mechanically equated.
Rankings of company wage medians prepared by Day Q Analytics based on public Sodra data show uneven wage development. The data history covers 453 retail, 535 wholesale, and 1,563 manufacturing companies. Data for 2026 was provided by 442 retail, 535 wholesale, and 1,509 manufacturing companies.
From 2019 to 2026, the median of retail companies increased by 78.2% – to 1,634 EUR. In wholesale trade, it rose by 74.3% – from 1,458 to 2,541 EUR, and in manufacturing by 72.6% – from 1,157 to 1,997 EUR.
However, the growth rate in 2026 is already much slower. In retail, the sector median increased by 4.4% year-on-year, in manufacturing by 4.8%, and in wholesale by 5.0%. This means that the previous almost double-digit wage growth in these sectors has ended.
Moreover, overall sector growth does not cover all companies. In manufacturing, comparable data for 2025 and 2026 was available for 1,483 companies, of which 330, or 22.3%, had a median lower than in 2025. In wholesale, a decrease was recorded in 128 of 529 companies, or 24.2%, and in retail – 70 of 434 companies, or 16.1%.
A lower median does not necessarily prove that the employer reduced base salaries. The change may be due to bonuses, allowances, overtime, changes in employee composition, or the departure of better-paid specialists. However, the data shows that overall wage growth is uneven and in some companies the insured income of the median employee does not increase.
Therefore, the country’s average wage may grow by almost 9%, but the median of a typical retail or manufacturing company increases by about 5%.
Almost half of employees earn up to 2,000 EUR gross
Data from Sodra in May 2026 covered 1,183,360 insured persons who worked at least 30 days per month. The largest group consisted of employees with a gross wage from 1,501 to 2,000 EUR – there were 233,980 such people. 190,850 earned from 1,154 to 1,500 EUR, and 144,670 employees received the minimum wage, up to 1,153 EUR or less.
569,500 people, or 48.1% of the analyzed employees, earned up to 2,000 EUR gross. 744,680 people, or 62.9%, earned up to 2,500 EUR. 10,530 people, or 0.9%, earned over 10,000 EUR, and 3,080 people, or 0.3%, earned over 15,000 EUR. From January to May, the number of employees in the last group increased from 2,720 to 3,080, or 13.2%.
These data are not recalculated to full-time equivalents, so the lowest income groups may include part-time workers, periods of illness or other uninsured times, and the effect of multiple workplaces. Nevertheless, the distribution shows that the overall national average growth does not characterize the income level of the majority of employees.
The same sectors – different wages
In manufacturing, the wage median exceeded 2,000 EUR in 746 companies, or 49.4% of all companies. Only 21 companies, or 1.4%, had a median exceeding 4,000 EUR. The average median of the top ten highest-paying companies was 4,971 EUR, 2.5 times higher than the sector median. The leader group is dominated by laser, photonics, electronics, space, and defense activities.
In wholesale trade, the wage level was the highest among the three sectors studied – the 2026 median was 2,541 EUR. The average median of the top ten leaders was 7,942 EUR, 3.1 times higher than the sector median. The wholesale trade top is formed by international pharmaceutical, chemical, and technology companies competing in the global specialist market.
In retail, the sector median was 1,634 EUR, but in 165 companies, or 37.3%, it did not reach 1,500 EUR. The average median of the top ten highest-paying companies was 4,835 EUR, while the average of the bottom ten was 812 EUR. The difference is almost sixfold.
In food retail, Lidl’s median was 2,087 EUR, Norfa Retail’s – 2,008 EUR, Iki Lithuania’s – 1,508 EUR, Maxima LT’s – 1,487 EUR, Rimi Lithuania’s – 1,414 EUR. In fashion retail, the wage level is much lower: Lindex’s median was 866 EUR, Apranga MLT’s – 947 EUR, Apranga SLT’s – 985 EUR, LPP’s – 1,183 EUR.
These differences show that one sector name can hide several separate labor markets. In some places, wages are raised by technological complexity, international markets, and high added value; elsewhere, they remain dependent on working hours, work organization, and the financial capabilities of the specific company.
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The greatest risk falls on the middle of the labor market
Wages are growing fastest for three groups. The first is the lowest-paid employees. In 2026, the minimum monthly wage increased from 1,038 to 1,153 EUR, or 11.1%. In 2027, it will reach 1,245 EUR – an increase of 92 EUR, or 8%. The decision will directly affect about 140,000 people working full or part-time.
The second group is part of the public sector employees whose wage development is determined by the state budget, collective agreements, and administrative decisions. The third is rare specialists creating high added value, whose wages are increased by limited supply and international competition.
The most difficult position may be for medium-skilled private sector employees: skilled manufacturing workers, accounting specialists, logistics coordinators, administrators, store shift managers, customer service employees, and some middle management.
Their wages are already higher than the minimum monthly wage, so its increase does not directly affect them. However, their skills are not always so rare that the employer is forced to pay a high market premium. In such cases, wage growth depends on the financial capabilities of the specific company.
The gap between unskilled and skilled labor wages is narrowing, although differences in responsibility, experience, and task complexity remain. A company without financial capacity may compensate for the increase in the minimum monthly wage by raising average position wages more slowly. Over time, employees may no longer see sufficient financial benefit in learning more complex work or taking on additional responsibility.
Weak spot – productivity
In the OECD’s 2025 review of Lithuania’s economy, it was noted that rapid wage growth increased underlying inflation pressure and unit labor costs. According to the organization, when wages in the trade sector grow faster than productivity, cost competitiveness weakens, and it is difficult for exporting companies to pass labor cost increases onto prices.
The European Commission’s 2026 report on Lithuania stated that the country’s labor productivity, calculated by GDP per hour worked in purchasing power standards, reached 70.4% of the EU average in 2024. At the same time, GDP per capita reached 87% of the EU average.
According to the European Commission, Lithuania’s hourly labor productivity decreased by 2.7% in 2022, by another 1.6% in 2023, and increased by only 0.3% in 2024. Unit labor costs per hour increased by 14.9% in 2022, 12.2% in 2023, and 5.6% in 2024. The European Commission’s estimate for 2025 was 6.1%.
Labor shortages push wages up but do not increase productivity by themselves. A company is forced to pay more for the same work result when a suitable specialist is not available on the market. A prolonged difference between labor costs and productivity increases pressure on prices, profitability, and investments.
Regions and future pressure
Wage growth opportunities also differ between Lithuanian regions. According to the European Commission, in 2024, GDP per capita in Vilnius County was 133% of the EU average, in Kaunas County – 86%, in Klaipėda County – 76%, and in other counties did not exceed 60%.
According to the European Commission’s regional supplement methodology, Lithuania’s average productivity was 82% of the EU average, Vilnius County – 110%, Kaunas County – 78%, Klaipėda County – 73%. The indicators for Marijampolė, Utena, Alytus, and Tauragė counties were about 60% or less. These indicators cannot be directly equated with the national 70.4% productivity figure because their methodology and territorial level differ.
Vilnius hosts more international companies, finance, technology, research, and high-skilled jobs. In smaller regions, traditional manufacturing, trade, and public services make up a larger share of employment. Therefore, the same percentage wage increase in different regions causes uneven financial burdens for employers.
Economic growth is expected to slow in 2027. The Bank of Lithuania forecasts 2.0%, and the Ministry of Finance – 2.3% GDP growth. However, wages according to these forecasts will increase from 6.1% to 6.9%, and the minimum monthly wage will rise to 1,245 EUR.
Demographic pressure will also not disappear. The OECD forecasts that from 2022 to 2050, the number of working-age residents in Lithuania may decrease by about 30%. Without additional policy measures, such a change would reduce Lithuania’s GDP and exports by about 10% by 2050.
Who will pay for this?
The most sustainable source of wage financing is productivity growth. Without productivity growth, a company has three main options: pass labor cost increases to consumers through higher prices, increase wages at the expense of lower profits, or reduce the need for employees by not filling vacancies, combining functions, and transferring some tasks to technology.
In trade, employee needs are already reduced by self-service checkouts, electronic price tags, and automated warehouses. In manufacturing, robots and automatic quality control are being implemented. In administrative activities, repetitive tasks are taken over by software and artificial intelligence solutions.
The greatest threat is not a universal wage decrease. Official statistics and forecasts do not show such a scenario. A greater risk arises for jobs where the value created does not cover their rising cost. Such positions may be merged, automated, or not replaced when an employee leaves.
Lithuania’s problem is not too slow overall wage growth. It lies in the sources and distribution of growth. The lowest wages are raised by the minimum monthly wage, public sector incomes are influenced by state budget decisions, wages of highly qualified specialists are increased by limited supply and international competition, while incomes of medium-skilled private sector employees remain dependent on the productivity, sales, and profitability of their specific company.
The most important question in the coming years is not just the percentage growth of the average wage. It is more important to assess what part of this growth will be based on greater value created by the employee. Otherwise, the employee will see a higher number on the payslip but will only feel a small part of it as a real improvement in living standards.
