Unions in Estonia want the monthly minimum wage to be hiked extraordinarily, to EUR 700, citing inflation and high energy prices. Employers are more lukewarm about the idea.
The current minimum wage per month is EUR 654, set at the end of last year.
The Confederation of Trade Unions (Ametiuhingute keskliit) made its proposal to the Confederation of Employers (Tooandjate keskliit) and to the government jointly, for the minimum wage to be increased to EUR 700 per month from July 1, and for the tax-free threshold to be set at the same level.
Peep Peterson, Confederation of Trade Union chair, said that high levels of inflation and soaring energy costs were behind the request for the extraordinary minimum wage rise.
Peterson said: “This was mainly due to inflation. When inflation, which sums up all the price increases, is already at a 15 to 19-year high, then mandatory expenditure, which constitutes more-or-less 100% of the minimum wage, is driving this price rally, it is clear that people are missing some EUR 100 to EUR 120 or more, without coverage.”
The Confederation of Employers is hearing out the unions’ proposals, but remains cautious.
Arto Aas, Confederation of Employers CEO, said: “Just four months ago, the minimum wage rose, its biggest increase ever, of EUR 70 per month, up by 12% YoY, and employers had to deal with that too. Input prices are rising fast. We need to think about the costs involved, the risks, the jobs. Excessive wage growth is also fueling inflation.”
Minister of Health and Labor Tanel Kiik (Center) representing the state said that the main question was when to raise the minimum wage.
Kiik said: “Since many state and local government subsidies and fees are linked to the minimum wage, meaning that they too need to be reviewed in the state budget, the entry into force on January 1 is the most logical for both the state and local governments and also, I think, employers and trade unions.”
Between 17,000 and 25,000 people in Estonia currently receive the minimum wage. (ERR/Business World Magazine)
