The Estonian Trade Union Confederation and the Estonian Employers' Confederation have begun negotiations on next year's minimum wage.
Estonia's minimum wage currently stands at 43 percent of the average wage or €946 per month. The Estonian Trade Union Confederation wants it to rise by more than 4 percent next year, bringing it above €1,000.
"We entered negotiations today (Monday — ed.) with the wage level agreed upon in the 2023 goodwill agreement, which would put the minimum wage at 47.5 percent of the average wage next year," said Kaia Vask, chair of the Estonian Trade Union Confederation.
Employers will present their counteroffer in subsequent rounds of negotiations. However, they consider the increase proposed by the trade unions too steep.
"The minimum wage needs to rise and the average wage has also increased, but the rate of increase must be something businesses can afford, particularly those located outside Tallinn and Tartu. Otherwise, jobs could simply disappear in some places. That is why this agreement has quite significant implications," said Hando Sutter, CEO of the Estonian Employers' Confederation.
Vask said that under the agreement signed three years ago, the minimum wage should eventually reach 50 percent of the average wage.
"The minimum wage needs to be raised so that everyone in Estonia can make a living from their wages. When prices keep rising and everything becomes more expensive, it gets increasingly difficult to make ends meet on a low wage," Vask said.
According to Sutter, any increase in the minimum wage must reflect what the economy can afford.
"Although we have seen some modest economic growth, there is still a great deal of uncertainty. Energy prices this coming winter will drive inflation and put pressure on economic growth, while input costs are also rising," Sutter said.
At the beginning of the century, the minimum wage stood at 30 percent of the average wage, rising to 41 percent a couple of years ago. Around 20,000 people in Estonia earn the minimum wage. It also affects the minimum rate of parental benefits, unemployment insurance benefits and, in some areas, kindergarten fees.
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