The dark side of the minimum wage hike ({{commentsTotal}})

With the monthly minimum salary set to increase from 390 to 430 euros from January 1, a number of fees tied to the rate, such as kindergarten fees, will also go up.

Labor and employer unions recently agreed to increase the minimum wage rate to 430 euros from the beginning of 2016, and to 470 euros a year later. The minimum wage was 290 euros in 2012, later increasing to 320 (2013), and then 355 euros (2014).

The hike will mean that monthly kindergarten fees, calculated from the minimum salary rate, but the percentage is fixed by local governments, will go up, with both Tallinn and Tartu saying they will allow the hikes to go through.

In Tartu that will calculate to 70 euros per child per month in kindergarten fees by 2017, plus a separate bill for food. The current rate is 58 euros. One parent of two children said she already pays her kindergarten 160 euros per month. She said that when her first child began kindergarten, the fixed fee was only 30 euros per month.

Riho Raave, head of the education department in Tartu city government, said the city will not decrease rates and parents will continue to pay 15 percent of the minimum salary per month per child in kindergarten fees. He said the money will be used to boost kindergarten teacher salaries.

Parents in Tallinn pay 10.6 percent of the minimum salary rate in kindergarten fees, meaning that the monthly fee per child will be nearly 50 euros from the beginning of 2017.

Deputy Mayor Mihhail Kõlvart said Tallinn has no plans to decrease the percentage of the minimum salary parents pay. He said state legislation dictates that kindergarten fees are tied to the minimum salary, adding that local governments will not change their laws every year to accommodate minimum wage changes.

Editor: J.M. Laats