Home > Uncategorized > The Invisible Side of Latvia’s ‘Success’ Story: Life with ‘God’s Mercy and the Goodness of Others’

The Invisible Side of Latvia’s ‘Success’ Story: Life with ‘God’s Mercy and the Goodness of Others’

On this blog, Henry Law repeatedly (and rightly) stated that news about the Baltic states should not just be based upon statistics but also on ‘field work’. Read this long article, the best piece of investigative journalism I’ve read for quite some time. An excerpt (ht: “Jan”):

from Re:Baltica

Latvia’s painful austerity program and recent economic growth is presented to the world as a success story and a model for other struggling countries resisting cuts. Re:Baltica’s investigation finds that Latvia has some of the highest poverty, unemployment and income inequality rates in the EU. What can other countries learn from Latvia to avoid the high human costs of its political choices?

When Zane Valdmane opens the door to her apartment, holding her two-year-old daughter Made in her arms, the chronic lack of money in this household is invisible at first glance. 36-year-old Zane’s athletic body and striking face, with tiny wrinkles around the corners of her lips, radiate health and joyfulness. The family’s small apartment in the city of Saldus, where Zane lives with her daughter and 13-year-old son Arturs, is orderly, calm, and filled with the light scent of a burning candle.

But as we talk at the small kitchen table set in a narrow kitchen, this idyllic family picture slowly dissipates. Two toothbrushes sit in a cup near the kitchen sink. There is no shower in this apartment. Made and Zane wash themselves in a small bucket in the kitchen. Arturs uses showers at his soccer gym. There is no refrigerator. Zane can’t afford to buy one or pay for electricity to run it. The kitchen walls are covered with wallpaper from three different rolls that Zane bought thanks to a church donation.

As a single mother, Zane is a part of the largest group at risk for poverty in Latvia. Overall, 425,000 people – or one out of every five people in Latvia – are poor. The monthly income of each household in this group is about 215 euros or less.

To see municipal social benefits paid
in 2011 in Latvia, click on the map.
Map: eazyBI

These families often don’t have enough money to cover rent, heat, or buy food. Sometimes, these homes don’t have running water, a phone or a TV. Last year, 100,000 Latvians lived on less than 65 euros a month.

The biggest joy and pride of Zane’s life —her children—turned out to be her biggest trial. Poor, single mothers like Zane have a harder time raising children in Latvia than in any other country in the European Union (EU). This is largely because Latvia spends less on social benefits that target the poor than almost any other EU country. The World Bank’s experts note that the Latvian government supports children from middle- and high-income families more generously than most European countries, but it invests the least amount of resources in children like Made and Arturs, who live in poor, single-parent homes.

Even after a significant expansion of the social safety net in the aftermath of the recession, Latvia’s spending on social protection programs for the poor was still among the lowest in the EU. For example, when the country faced the world’s deepest recession in 2009, only Bulgaria and Romania spent less on social protection programs. Estonia spent 40 percent more per capita than Latvia, Lithuania spent 33 percent more.

Re:Baltica called two companies that had the most openings to see what kind of jobs are available for people like Zane.

The first company, IMS, located about an hour and a half away from Saldus, is a fish processing plant. They are looking for people to pack cartons and seal containers. The pay depends on how many cartons are processed and the size of the box being packed. If the worker can do 1.5 shifts, it is possible to make more than 287 euros per month. Since Zane lives over 100 km away, the manager promised a bus ride. There are hostels at the processing plant too, but workers will have to pay to stay in them. Another company, Bears Ltd. is looking for cookie bakers, but openings are only in the night shifts. Each shift is 12 hours, and pay is about 2 euros an hour.

There are also some openings in grocery stores, but Zane already tried this route when she worked for a local butcher, and there was little gain. Work hours were from 9 am to 9 pm. The employer refused to sign a contract, offer sick leave, or vacation. Salary: 215 euros under the table. After Zane paid a babysitter, she ended up with less money than even the meager state benefits she currently receives.

  1. October 23, 2012 at 8:20 am

    Latvia 2010

    Riga - house of the Blackheads

    Tallinn 2006

    Tallinn - spires

    Estonia 2006

    Kallaste and Lada
  2. October 23, 2012 at 11:09 am

    That is a very accurate description of what the government (with the impulse from the Troika…) is trying to achieve in Portugal… And unless there is resistance that is exactly what they are going to achieve.

  3. October 23, 2012 at 12:48 pm

    Anwai Law was I believe the author of the article, not me.

  4. Podargus
    October 23, 2012 at 6:07 pm

    What a pity that more economists,especially of the neo-classical class,don’t get off their fat backsides and do some “field work”.

  5. Alice
    October 24, 2012 at 9:48 am

    Field work? Thats only for real scientists.

    • merijnknibbe
      October 24, 2012 at 9:51 am

      Does anybody know about an economics curriculum where students have to do fieldwork (like for instance gathering prices at different supermarkets, interviews with unemployed or entrepreneurs, talking with economic statisticians, whatever, the economic equivalent of the fieldtrips of geologists/biologists/archeologists, whatever)?

      • October 24, 2012 at 11:35 am

        I do not think it is just «field work» (which sociologists have to do, and a lot…). that is missing… I am told by friends from several countries that conventional (or mainstream) economists do not have to study «research methodologies» and also not (even if only at PhD level) «epistemology or the «philiosophy of sciences». In other words, they – the graduate schools of economics – have also taken the philosophy out of the PhD… Does anyone have knowledge to confirm (or disfirm) this? .

  6. Jason
    October 24, 2012 at 3:32 pm

    Neoclassical nonsense is totalitarian dogma. They do not allow any discussion on value, their assumptions and many other things only about perfections of free market. As for “success” of Latvia, all former socialist passed through that “success” of neoclassical economicsts and their liberal policies. Honestly looking at what they did to those countries, and how those countries can not recover even now, after 20 years, those neoclassicals economist should be prosecuted as criminals.

  7. Jims
    October 26, 2012 at 11:54 am

    Look at picture how M. Friedman doing his field-work, experimenting with crazy utopia ideas on real people. How many died in his field-work experiments.

    • October 26, 2012 at 5:50 pm

      If the reality out there «in the field» does not conform to our «model», then lets change that reality… By force, if necessary… That’s «free markets» for you…

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