The minimum wage should be raised!

As the former chairman of the trade union support group in the Riigikogu and as an elected MEP from Ida-Viru County, I cannot agree in any way with the proposal of the Estonian Small and Medium Enterprises Association (EVEA) to abolish the national minimum wage or replace it with a multi-level and region-dependent minimum wage scheme.

The reason is simple: the Estonian economy cannot be boosted at the expense of the weakest part of the labour market - minimum wage earners. Yes, I understand that many entrepreneurs are struggling in these difficult times. This is largely due to the government's lack of economic policy and a tax policy that places too much of a burden on small businesses. Minimum wage earners are finding it even harder! It would be simply cruel to deny them the hope that their wages will at least rise a little in January.

If anything needs to be done about the minimum wage, it should be to speed it up. Recent Eurostat data show that Estonia's minimum wage is the lowest in the European Union in terms of purchasing power parity. At least part of the reason for this dismal statistic may be that Estonia has still not transposed the EU Minimum Wage Directive, which strongly recommends raising the ratio of the minimum wage to the average wage to 50%. In Estonia, the corresponding figure is currently 42.6%.

Low purchasing power also means that a minimum wage earner can buy fewer Estonian products and goods than he or she would like. At the same time, it must be understood that a minimum wage earner is not just an expense item in a company's accounts, but also a paying customer. If the minimum wage is too low, the purchasing power of many people is too low.

However, we should not paint too black a picture: the number of unemployed registered with the Unemployment Insurance Fund at the beginning of June was lower than in the previous three years, as was the registered unemployment rate. The same is true for the three south-eastern Estonian counties, the historical problem child of the Estonian labour market. The unemployment rate in Ida-Virumaa has also fallen compared to the previous year and the year before.

Perhaps the EVEA president's view that a rise in the minimum wage will only lead to redundancies is half-hearted: the unemployment situation has improved recently, not worsened. This is in spite of the increase in the minimum wage.

As a person from Ida-Virumaa, I must emphasise that all employees must be treated equally. Different minimum wages for different regions would probably mean that the minimum wage in Ida-Viru County would be lower than in Tallinn or Tartu.

Do East-Viru workers really deserve less?

I don't think so - the minimum wage is the minimum that every full-time worker should be guaranteed. It is a question of equal treatment and dignity. With all due respect to entrepreneurs: yes, freedom to do business is important, but so is the livelihood and social rights of the weakest.

As for the social dialogue between trade unions, employers and the state, it must be promoted and deepened, not abandoned.

I understand that the EVEA would like to be more involved in the negotiation process. This is a legitimate wish, but it should be met by working with the Confederation of Employers - in exactly the same way that trade unions that are not members of the Estonian Trade Union Confederation work with the ETUC to develop common positions.

It is workers' representative organisations, or trade unions, that know best what workers' interests and wishes are. Not that trade union membership could be any bigger.

Source: delphi