Minimum wage likely to rise 2.7 percent next year

Welding equipment (photo is illustrative).
Welding equipment (photo is illustrative). Source: ERR

The minimum wage is likely to rise to over €600 a month for 2022, from the current €584, in place since 2019.

Peep Peterson, head of the trade union federation (Ametiühingute keskliit) , told ERR Thursday that: "The agreement can only come after the Confederation of Employers board meeting on September 15, but the new minimum wage will certainly start with the figure six."

Head of the Confederation of Employers (Tööandjate keskliit) Arto Aas confirmed the decision's timing.

He said: "Negotiations are still at the very beginning, but news is expected in a month's time."

Aas also told business daily Äripäev (link in Estonian) that the figure would exceed €600, adding that his organization did not want too sharp of a hike.

A rise from €584 to €601 per month would represent at 2.7 percent increase.

Both parties to the collective bargaining decided last year to freeze the minimum wage at its current figure for a second year, mainly due to the economic effects of the coronavirus pandemic.

However, Estonia's economy in 2021 has performed better than not only 2020's forecasts, but even those earlier on this year, according to the most recent analysis.

There are around 20,000 minimum wage earners in Estonia, says Siim Espenberg, head of Center for Applied Social Sciences (RAKE), part of the University of Tartu's Johan Skytte Institute of Political Studies.

The minimum wage hike will, however, directly affect a greater number of people than this, Espenberg continued, since levels of other social benefits and allowances are linked to it.

Inflation on year to July was 5 percent, state agency Statistics Estonia says. The same increase applied to the minimum wage would give a sum of €613.


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Editor: Andrew Whyte

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