According to Unt, poverty is a highly multidimensional phenomenon. "One common understanding of poverty is when someone struggles to afford basic needs — having an empty stomach, difficulty paying rent or utility bills. You are unable to meet your essential needs," she said on Vikerraadio's program "Teise mätta otsast." While this describes absolute poverty, there is also the concept of relative poverty. "This means that you are unable to maintain a lifestyle that is considered standard in a given country," Unt explained.

Rebane pointed out that as of 2023, people in Estonia living in absolute poverty had an income of €338 per month, while those in relative poverty earned €876 per month. The gap, she noted, is quite significant. "At the same time, we can say that thanks to state redistribution of wealth through the pension system, a substantial number of pensioners are not in absolute poverty but rather in relative poverty," she added.

Unt agreed that absolute poverty was a much bigger issue in Estonia around the year 2000, when nearly a third of the population lived below that threshold. Today, however, only a few percent of people in Estonia live in absolute poverty. "Looking at the bigger picture, we have made tremendous progress over the past two decades," the sociologist concluded.

According to both researchers, inequality has increased over time. "This is not just the case in Estonia but in most highly developed Western countries," Rebane pointed out. Unt added that Estonian society experienced a long period of leveling out and different forms of inequality are only now gaining momentum. "Most inequality today still stems from the labor market and wage disparities," she noted.

Another growing concern, according to Unt, is housing inequality. Based on sociological research, she sees this as a particularly pressing issue for young people. "In 2013, an average salary in Estonia was enough to buy one square meter of living space, but by 2023, that was no longer the case," she compared. As a result, both researchers observed that the gap between those who already own property and those looking to buy their first home is widening. "Looking at a ten-year period across all countries worldwide, Estonia has seen the fastest increase in real estate prices — nearly 200 percent," Rebane noted.

Talking about money might be a precursor of debt

According to Marit Rebane, discussing money remains taboo in Estonia. She and her colleagues have studied financial literacy and found that, unfortunately, even spouses or partners often do not share information about their financial situation with each other — especially when they face difficulties. "If both adults in a household have separate payday loans that they do not discuss with their partner, it can lead to a downward spiral that becomes much harder to escape later," she explained.

Marge Unt agreed, emphasizing that people can only make financial choices if they are aware those choices exist. "When I hear how someone else manages their finances, it gives me a chance to think, 'Aha, I hadn't considered that option myself,'" she reflected. Moreover, she noted that most poverty indicators are measured at the household level, meaning they are based on the family's income from the previous year. "Women are less frequently classified as being in relative poverty because, quite often, household-level assessments smooth out individual financial difficulties," Unt added.

At the same time, the gender pay gap in Estonia still disproportionately affects women. "In 1994, the gender pay gap was nearly 29 percent; by 2023, it had decreased to 13 percent. So, while it has narrowed, it has not disappeared entirely," Rebane explained. Additionally, in Unt's study, women reported feeling the impact of poverty more acutely than men when managing household resources.

Another factor tied to social norms and economic inequality, according to Rebane, is Estonians' strong desire to maintain a polished outward appearance for as long as possible — or even to outdo their neighbors. "People go to great lengths to keep up a facade," she noted.

Data from court bailiffs indicate that as of 2022, Estonia's largest debtors were middle-aged men. Rebane pointed out that these individuals should be in their prime working years and earning high salaries. They may appear to be financially stable, with a two-income household, leased cars and a home purchased with a mortgage, yet their debts often remain hidden from those around them. "This highlights the reality that at any point in life, any of us can find ourselves in a vulnerable financial situation," she concluded.

Relationships are a wealth

Who can count themselves rich? Rebane turned to an old saying to answer this question: "A rich person is not someone who has everything, but someone who is satisfied with what they have." In other words, a person earning the median salary but with an emergency savings buffer may feel far more financially secure than a high-income earner living paycheck to paycheck.

Marge Unt referenced theologian Toomas Paul's idea that people have an inherent longing for completeness, part of which is the desire to feel wealthy. She noted that the key question is not just one's financial situation, but also who they compare themselves to. "It's clear that no matter how high someone climbs, there will always be others ahead. And if there's no one else left to compare to, well, there's always Elon Musk," she mused.

While Unt acknowledged that it is genuinely difficult to be happy on an empty stomach, long-term studies have consistently shown that human relationships are a far greater source of happiness. Rebane echoed this in her master's research at the University of Oxford, where she analyzed long-term British data. "One universal factor that made people — at least the British — happy and able to cope well in later life was the sense that they had some degree of control over their lives," she recalled. In addition to strong relationships, even small things mattered — for example, a care home resident tending to a houseplant provided them with a meaningful sense of responsibility.

Where could the state help?

According to Marge Unt, effective measures exist to reduce absolute poverty, and in this regard, Estonia has become significantly wealthier over time. "However, relative poverty is a more complex issue because it is tied to income distribution," she pointed out. The key question, she explained, is the relationship between the minimum wage and the poverty threshold. At the European Union level, there is pressure for the minimum wage to be higher than the poverty line in each country. "But as soon as we force companies to raise wages in the market, it creates upward pressure on all salary levels. This does not necessarily reduce overall inequality," the sociologist noted.

Marit Rebane added that the purchasing power of wages varies from country to country. Moreover, she argued that a wage figure alone does not reflect local quality of life — for example, access to clean nature. She also agreed that simply raising wages does not solve economic problems but instead fuels inflation. "The only way wage increases can be justified is through productivity growth," she emphasized.

According to Unt, managing one's income is something individuals can actively think about. For example, there is a significant difference between buying ready-made meals from the store and cooking at home. However, when it comes to reducing inequality, there are areas where the state could step in to support ordinary people. "If real estate prices rise faster than wages, that's a situation where the government can intervene — because individual people have very little control over it," the sociologist pointed out. Rebane added that in Estonia, wealth taxes should also be discussed as a way to promote a fairer distribution of wealth.

"Money tends to accumulate in large piles, which tendency will only grow if we do nothing," Unt observed. She emphasized that fostering a more equal society can happen on many levels, including through cultural traditions like the national song festival and choral movement. "These kinds of events keep us connected and it's crucial that they remain accessible to the general public." Choirs bring together people from different backgrounds, encouraging interaction and social cohesion. Similarly, local community hubs such as village libraries strengthen social ties. Unt argued that municipalities should provide greater support for these small but significant community spaces.

Rebane agreed, stressing the importance of social cohesion. "A sense of unity is the very reason we need a country in the first place," she concluded.

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