Unions, employers agree 2023 minimum wage rise to €725 per month

Jaan-Hendrik Toomel and Arto Aas
Jaan-Hendrik Toomel and Arto Aas Source: ERR

The two major groups representing employers and employees in Estonia on Monday struck an agreement on the minimum wage for 2023, which will be set at €725 per month gross, a rise of €71 per month on this year's figure.

Arto Aas, head of the Estonian Employers' Confederation (Eesti Tööandjate Keskliit) called the deal compromise, one which should take into account both the current high levels of inflation, and the cooling economy.

Aas said: "Rapidly increasing input prices and energy costs are putting our entrepreneurs under a high level of pressure, which unfortunately is not contributing competitiveness and confidence in the Estonian business environment."

 "At the same time, it is clear that employees on lower incomes need more support to cope with the rapid rise in inflation, while every pair of hands comes at a high price in our already small labor market," Aas added.  

The minimum wage will rise by 10.9 percent on year to 2023, and constitutes 39.3 percent of the average monthly wage in Estonia.

Jaan-Hendrik Toomel, head of the Estonian Trade Union Confederation (Ametiühingute Keskliit), representing employees, said the combination of the newly signed minimum wage increase agreement with employers, plus the increase in the income tax-free minimum which will be implemented from next year, will leave more than €100 per a month left over for people with lower incomes.

Toomel said: "Against the backdrop of high inflation and rising energy prices, this is a significant financial victory for people earning lower wages, while it also helps to offset other lower-than-average salaries."

Monday's agreement still requires the approval of the two organizations' boards.

July's rate of inflation was just under 23 percent.


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Editor: Andrew Whyte

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