Salaries Growing Too Quickly, Says Bank of Estonia Economist (1)
The 8.5 percent jump in average monthly gross salaries is in conflict with the very slow pace of economic growth and with the decline in productivity, Bank of Estonia economist Orsolya Soosaar said today.
In comments on the Bank of Estonia's website, Soosaar said that if economic growth does not pick up, wage increases will slow considerably.
A number of reasons contributed to the 8.5 percent year-on-year increase seen in the second quarter of 2013, including the 10 percent minimum wage rise - to 320 euros per month - on January 1, Soosaar said.
Collective agreements with teachers and medical workers took effect in spring, which pushed up salaries in those sectors, while in a number of industries, such as transport and construction, salary increases have been gaining pace as workers now have increased opportunities to find better paid work abroad.
In the transport and storage industry, salaries jumped 8.6 percent in the first quarter and 15.4 percent in the second quarter compared to the same periods of last year, while the corresponding figures in construction were 6 percent and 12.7 percent.
Soosaar said that a slowdown in wage increases is expected very soon, as economies tend to react to decreased overall growth in one or two quarters.