Social Democrats: Government should lay down €1,200 minimum wage

Lauri Läänemets.
Lauri Läänemets. Source: Siim Lõvi /ERR

The Social Democratic Party's (SDE) proposal of wage hikes for all Estonians also prescribes a minimum wage of €1,200 per month to be laid down by government decree. Estonia would pay smaller employers compensation for first two years.

The Social Democrats will prioritize people's salaries and coping at 2023 Riigikogu elections, the party revealed at its Saturday general meeting. "Our central proposal for growing people's income, hiking the standard of living and restoring economic security is to hike the minimum salary to €1,200. While the minimum wage is traditionally agreed between employers and unions in Estonia, SDE wants to lay down the €1,200 minimum by government decree starting from January 1, 2024, party leader, Estonia's Minister of Internal Affairs Lauri Läänemets told ERR.

Whereas minimum wage hikes go beyond and also push up the general level of salaries, Läänemets suggested.

To avoid putting small companies under sudden salary pressure, SDE would carry out the hike in stages. "We would offer companies wage compensation during the first two years. The state would pay for 50 percent of the difference during the first transition year – 2024 – and 25 percent during the second year – 2025," the SDE leader proposed.

Hiking next year's minimum wage of €725 to €1,200 the following year would see Estonia pay employers €239 per employee in 2024 and €119.5 percent in 2025, Läänemets said. "Two years should be enough time for the economy to stabilize and companies to adjust to the new salary level," Läänemets found.

Women's salary level would go up

The Social Democrats hope to kill several birds with on stone with their minimum wage proposal.

"Firstly, it would help the most vulnerable social group, while the general salary level catching up would benefit everyone. The cost of living in Estonia rivals that of Finland, while our salaries are virtually half theirs. Hardly a normal situation, Läänemets said.

"We would also be solving the gender wage gap problem as most people earning a modest income in Estonia are women – in the service sector, but also caregivers, healthcare and nonprofit sector workers. Therefore, bolder steps to hike the minimum wage would help us battle gender inequality in income and empower women through greater economic independence," Läänemets found.

In order to ensure companies' survival, SDE want also want to hike and expand energy compensation measures.

The November poll commissioned by ERR and carried our by Kantar Emor gave the Social Democrats a rating of 8 percent, down from 11 percent in September.

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Editor: Mari Peegel, Marcus Turovski

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