Government may pay shale oil workers to take new lower paid jobs

Mining in Estonia (photo is illustrative).
Mining in Estonia (photo is illustrative). Source: Rene Kundla/ERR

Estonia could use EU funding to subsidize the wages of shale oil workers who leave the sector and take lower-paying jobs elsewhere as part of the green transition, Minister of Economy and Information Technology Tiit Riisalo (Eesti 200) said on Thursday.

The plan would see those who register as unemployed and then find work within 100 days paid 30 percent of their previous salary for 12 months.

For shale oil sector workers, looking at the average salary, this could amount to an addition €600-€1,000 a month.

€7 million would be set aside for the plan, with €5 million coming from the EU's Just Transition Fund and the remaining money from the government budget.

Estonia's shale oil industry is mainly located in Ida-Viru County in eastern Estonia and other jobs in the region, and those being created, have lower salaries, the minister said.

"Wages in the oil shale sector are somewhat higher and this discourages people [from seeking new jobs] and can lead to a feeling of hand-wringing. So to avoid this happening, to make the transition as smooth as possible, we are supporting these people to make this wage change," Riisalo told ERR on Thursday.

Tiit Riisalo. Source: Siim Lõvi /ERR

Riisalo has sent a draft proposal to the Ministry of Social Affairs for discussion.

He said while new jobs are being created in the region, it is not very easy to directly go from one to another as shale oil workers often have very specific skill sets. This measure would ensure a "smooth and rapid transition" to new employment.

It is of interest for both the state and the individual to make the transition as fast as possible, he added. This measure will also help workers overcome problems, especially financial barriers.

Riisalo is convinced that workers who leave the sector, where the average salary is currently €2,140, do not want to stay unemployed or claim unemployment insurance benefits for long.

"I'm sure that for most people, unemployment benefits are not a nice way to make a living. In fact, for people, work is very much about self-fulfillment and you want to have a dignified position in society and not be on the dole," he said.

Enefit oil-shale burning power station at Auvere, just west of Narva. Source: Sergei Stepanov/ERR

This will be the first time Estonia has used this system across a whole industry sector.

"But experts have assessed that it could have an impact, and we hope that it will indeed have an impact," Riisalo said.

Asked how individuals will cope after the 12 months ends, the minister said this period gives people time to adapt to their new circumstances.

"Of course, no measure of this kind can be a permanent solution that will last forever. But let me repeat that the aim is to make this transition as smooth as possible," he said.

The newly launched magnet factory in Narva will create 350 jobs in the region and hopefully encourage other businesses to move there, the minister said. This would increase job opportunities and, hopefully, wages.

In Ida-Viru County the average salary is currently €1,380.


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Editor: Mait Ots, Helen Wright

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