Lithuania labor market faces aging, migration shifts

That matters economically because the country’s growth model can no longer rely on a steady supply of younger workers. Experts warned that by 2050, one in three Lithuanians could be 65 or older, shifting demand toward health care, services and other age-related industries while shrinking the pool of working-age employees available for manufacturing, retail and logistics.

The labor squeeze is already visible in the mismatch between jobs and workers. Official unemployment is about 7%, or roughly 150,000 registered jobseekers, but businesses say labor shortages persist because workers are in the wrong places. Rimi Lietuva chief executive Vaidas Lukoševičius said it is easier to hire in eastern Lithuania than in Vilnius or resort towns, and the company now runs more than 20 buses a day to move employees to work.

For investors, that points to higher wage pressure, more spending on automation and a need for companies to squeeze productivity from every worker. Lukoševičius said Lithuania’s minimum wage has risen for five or six straight years and costs his company an extra 2 million to 3 million euros annually, pushing firms toward internal efficiency gains instead of price increases.

Artificial intelligence adds another layer to the adjustment. Balnanosienė said the more realistic risk is not that AI eliminates all jobs, but that workers who use AI will replace those who do not. Lukoševičius added that some IT tasks can already be handled by AI, lowering the need for higher-skilled staff in some roles and increasing demand for employees who can run and support new processes.

The broader message for employers and policymakers is that Lithuania’s labor shortage is no longer only about headcount. It is about mobility, skills, older-worker participation and how quickly firms can reorganize around technology before labor costs climb further and productivity gains become the only offset.