Bank of Estonia Governor Ardo Hanson said an idea by banker Indrek Neivelt to raise the minimum wage to 1,000 euros by 2018 is unrealistic.
“The goal is righteous of course – we want to increase productivity, so businesses would become more efficient and there would be a basis for faster increase of salaries,” Hanson said today, speaking in front of Parliament.
He said the matter is not as simple as the government, employers and employees agreeing to increase the minimum wage, which would then immediately boost the economy, adding that economic development is more similar to a marathon than to a sprint event.
Salaries increased annually by 15 to 20 percent during the boom days, Hanson said, adding that the nation suffered as the result of the fast-paced economic growth.
Neivelt said increasing the minimum salary by the odd 10 euros each year will not lead Estonia anywhere, proposing instead to increase it to 1,000 euro gross per month by 2018, when Estonia turns 100 years old.
Currently the minimum gross monthly salary is 355 euros. Here is how it has progressed in the past 10 years:
2004: 158.50 euros