Negotiations between trade unions and employers on the minimum wage for the next two years, which started today, promise to be tense. Trade unions say that the minimum wage must in any case be higher than the tax-free minimum, and disagree with the employers' position that there will be no increase at all next year.

Over the last five years, the minimum wage in Estonia has risen by an average of 10% per year, which puts Estonia in second place in terms of the size of the minimum wage in Central and Eastern Europe after Slovenia. In terms of purchasing power, our minimum wage ranks sixth from the bottom in Europe. According to Peep Peterson, President of the Estonian Trade Union Confederation, maintaining and creating the conditions for wage increases should be a joint daily effort of politicians, employers and employees.

"Estonia came to the European Union with certain expectations and hopes. We need to be clear about them and determined to deliver. We certainly need to improve the well-being of low-wage earners, and raising the minimum wage is one of the ways. Do we need to put the brakes on the minimum wage so that other countries pass us by?" Peterson asked.

Higher minimum wage would reduce labour shortages by sector  

Elle Pütsepp, president of the Service and Commercial Workers' Union, added that while problems differ between sectors, labour shortages are a common concern. "In the retail sector, the number of shops is growing very fast, competition is very strong, but there is no increase in the workforce. It's very difficult to manage on such low wages, and that's why it's hard to find staff," said Pütsepp.

The union leader added that higher wages and a higher valuation of workers will allow employers to recruit better qualified workers and increase the competitiveness of companies.

Why should you have to pay extra to go to work?

According to Sander Vaikma, President of the Energy Workers' Union, companies should move away from this business plan, which focuses on exploiting low-paid labour. "Those days are over," Vaikma said.

The union leader added that employers paying the minimum wage should not blame people for labour shortages. "If a worker has to be essentially paid to go to work, he or she will look for a more lucrative job, or be unemployed and work on upgrading himself or herself to find a better paid job in the future," Vaikma said.

The problem for the economy is not rapid wage growth but low productivity.

Trade unions argue that rising incomes are boosting the economy and that the main problems today are low productivity, unchanging work processes and a failure to exploit technological opportunities. Failure to raise the minimum wage would further exacerbate wage inequality, which is currently high on the agenda in many European countries.

The Estonian Trade Union Confederation's negotiating delegation includes Peep Peterson, President of the Estonian Trade Union Confederation, and Kaja Toomsalu, Wages Secretary, Elle Pütsepp, President of the Service and Commercial Workers' Union, and Sander Vaikma, President of the Energy Workers' Union.

The second round of minimum wage negotiations will take place on 21 June at 13.00 in the Employers' House at Kiriku 6, Tallinn.