Arto Aas, executive manager of the Estonian Employers Confederation, told ERR that the government should not meddle in hiking the minimum wage if it wants to respect European practice, and that employers were told to get it done or the new coalition would do it for them.
Aas told the "Uudis+" radio show that the minimum wage in Estonia has been hiked by 11-12 percent annually in cooperation between employers and unions, which has exceeded forecasts of around 8 percent. He added that the minimum wage has traditionally been an agreement between employers and unions in which the government has not meddled.
While Estonia has around 650,000 workers, only tens of thousands make the minimum wage. "It is not much. However, minimum wage hikes also affect other lower end salaries. Its effect on salaries and growth is considerable, while certain state expenses, benefits and services are also tied to the minimum wage. So, the effects go beyond a few tens of thousands of people," Aas said.
The employers' representative said that risks include payment under the table and unemployment growing. "We are mostly concerned for Ida-Viru County and Southern Estonia where the average salary level is much lower than in Tallinn and where paying a very high minimum salary could prove too much for businesses."
Aas said that politicians have not meddled in these negotiations so far and he considers the current situation to be a poor trend.
However, he said that employers agree minimum salary should grow faster than previously. "We have accepted the EU and now Estonia's position that minimum wage should come to 60 percent of the median pay."
Lauri Läänemets, head of the coalition Social Democratic Party, has suggested that should employers, unions and the state fail to agree on an acceptable minimum wage level, the government can do it for them.
Arto Aas said that while the government would be within its rights to do so, it would not constitute good practice in Europe. "We were basically given an ultimatum and told that if we fail to agree, they would fix it in legislation where the deadlines and sums would be even more utopian. Basically, we had a gun to our head and had to accept the current political reality."
He added that he knows Eesti 200 and Reform are against fixing the matter on the level of legislation, while the Social Democrats also have influential members and former union representatives who do not support this approach.
Editor: Marcus Turovski