Trade unions, employers may reach minimum wage agreement next month

Euro banknotes on display at the Bank of Estonia.
Euro banknotes on display at the Bank of Estonia. Source: Siim Lõvi/ERR

Trade unions and employers tentatively plan to reach an agreement next month that would see the minimum wage rise higher than usual this year and set it at 60 percent of the median wage within four years.

Minimum wage discussions usually take place in the autumn, but junior coalition partner the Social Democrats (SDE) highlighted the issue during government negotiations last month.

SDE has linked the issue to coalition leader Reform's planned tax rises which will soon be discussed by the Riigikogu.

The party wants an agreement between unions and employers to be concluded as soon as possible, on both this year's rise and a plan for the next four years.

"The focus could now be on agreeing on a four-year framework and the minimum wage for 2024 in May," Minister of Health Riina Sikkut, SDE vice-chairman, told Friday's "Aktuaalne kaamera".

Riina Sikkut. Source: Ken Mürk/ERR

"There is no reason to believe that this agreement will not be reached, I am really optimistic about this," she added.

The Confederation of Estonian Trade Unions and the Estonian Employers' Confederation are skeptical about the possibility of reaching an agreement on next year's minimum wage next month. 

However, it is not a goal in itself for either side.

Jaan-Hendrik Toomel, head of the Confederation of Estonian Trade Unions, said: "That kind of general agreement, I think, is achievable. But it may take more time to get to those figures, and I can't predict exactly when at the moment."

Arto Aas, head of the Estonian Employers' Confederation, said: "We are now planning to conclude a broader framework agreement for the next four years in May, in cooperation with the trade unions and the government. We accept that the minimum wage has to go up and it will certainly go up further in the coming years. But I think we will still have to agree on a specific figure with the unions in September and October."

Estonian Employers' Confederation (ETTK) chief Arto Aas. Source: ERR

Sikkut said it is important that these figures are known during budget negotiations in order to implement other necessary measures.

The state budget will be prepared in August. The employers' union does not think this is a credible or necessary deadline.

"In August, there will probably not yet be [an agreement]. Also in the past, the government has handed over the national budget to parliament without knowing the minimum wage figure. This is not a problem, these changes can then be made in parliament during the reading of the state budget," Aas said.

The minimum wage is €725 in 2023 while the average wage is approximately €1,700.


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Editor: Marko Tooming, Helen Wright

Source: Aktuaalne kaamera

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