This year, the minimum wage for full-time work is €820 and the minimum hourly wage is €4.86.

Kaia Vask, head of the Confederation of Estonian Trade Unions, said approximately 20,000 are paid this salary.

"Most of them are still in the service sector, such as cleaners. Surprisingly, this also includes truck drivers. This is because they use an option to increase their income by receiving daily allowances, which are not taxed, resulting in a lower official salary. This cost-saving approach has been adopted. However, in the service sector, I have not noticed this practice – those workers truly live on that small wage," Vask explained.

Estonian Employers' Confederation head Arto Aas said he has little optimism ahead of the discussions.

"Unfortunately, it is a relatively poor and uncertain time for the economy, so there is no reason for very high hopes. We will take the latest forecast from the Bank of Estonia as a basis and look at what growth will look like in the coming months," he said.

The minimum wage rose by 13 percent in 2024, but tax increases and cuts are scheduled for next year.

Unions believe that a 12 percent increase proposed by the Social Democrats would be a reasonable outcome.

Vask said a goodwill agreement has been signed with the employers until 2027.

"We have agreed with employers how the minimum wage should rise until it reaches 50 percent of the average wage. By next year, it should be 45 percent of the average wage," said Vask.

However, Aas said the agreement was made in better economic times. He added wages have been growing faster than productivity for a long time

"At the time when this goodwill agreement was put on paper, the expectations in society were different – much more optimistic. There was also political pressure behind the conclusion of this agreement," he said.

"But now it seems that, because the economy has been in recession for nine, 10 quarters, we all have to accept that our incomes will now grow at a slightly more moderate pace than they have been for some time. It's actually been a long-term trend that wages in Estonia have grown faster than our productivity. What the problems will entail in the long term is what we are seeing now with the state budget and in the public sector, which has been living beyond its means. The state is likely to have to freeze wages in the public sector. So we have to be realistic," Aas said.

The negotiations schedule will be released when the new head of the Estonian Employers' Confederation, Hando Sutter, takes office at the beginning of October

"What is certain is that the minimum wage will have to be agreed this year, because the government will approve our agreement and it will enter into force on January 1, 2025," Vask said.

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