The Employment Contracts Act amendment proposed to the Riigikogu by the [ruling] Reform Party and Eesti 200 is being pitched rhetorically as a flexible magic wand meant to help groups like students or pensioners enter the labor market. In reality, this is no magic wand — it's a club, and many working people are about to feel its impact. Namely, the proposed change would allow employers to unilaterally decide an employee's monthly salary, as they would now only be required to guarantee ten working hours per month instead of the current forty-hour workweek. The rest would be up to the employer's discretion.

In practical terms, this means that an ordinary wage worker might one day find that although they were hired full-time, by the end of the month they've received only a quarter of the agreed-upon salary.

So instead of tax-free Fridays, the Reform Party is now bringing working people pay-free Mondays, Tuesdays and maybe even Wednesdays.

Putting irony aside, this is catastrophic for the everyday worker's sense of security. You can no longer count on a stable income from month to month. How do you feed a family, pay — or even apply for — a mortgage or a car lease if you have no certainty about your monthly earnings? And crucially, this wouldn't depend at all on the employee's own effort or performance. During an economic downturn, the use of "on-demand pay" would likely become widespread, turning it into a nightmare not only for employees but also for banks issuing loans — and, ultimately, for the entire Estonian economy.

The government's plan to bring in large numbers of cheap foreign laborers will only increase pressure on workers and depress wages in many sectors and regions. While labor migration is often associated with social democrats, in countries like Germany it was actually the more conservative forces that opened the borders. The reason was simple: to ensure a plentiful supply of cheap labor for large industry.

That said, let me stress: social democrats do understand the need for skilled specialists. But the projected number of incoming workers, combined with the plan to scrap the higher salary requirement for specialists, is cause for concern — especially considering that the current immigration quota of 1,300 people wasn't even fully used in 2024.

A large-scale increase in labor immigration is only a temporary fix for the state's long-standing failure in education and labor policy. The state has not been able to supply its businesses with adequately skilled labor or to retrain workers from declining sectors where labor is in surplus.

Education is not just a personal responsibility, as right-wing parties like to say — it is a societal priority. An educated and skilled workforce is the foundation for economic growth, entrepreneurship and innovation. That's why it is always wrong to view teacher salaries or free higher education as mere state budget expenditures. Education is the most profitable economic investment a state can make.

The state has three core objectives in shaping labor policy: first, to ensure businesses have access to qualified workers; second, to provide residents with the necessary training to earn a decent living; and third, to steer the national economic model toward higher added value. On the latter two, the current right-wing government has effectively given up — choosing instead to address labor market shortcomings at the expense of workers' rights and job security, while also placing downward pressure on local jobs and wages through cheap foreign labor.

These are shortsighted policies, and we've already seen their consequences in many Western countries, where citizens increasingly feel displaced from their own labor markets and replaced by immigrant workers.

Workers are now essentially being told: either accept a lower wage without any guarantee of working hours or monthly pay — or be replaced by someone brought in from a country the name of which ends in "stan."

In the long run, such a labor policy has serious implications for both domestic politics and social cohesion. Across the developed West, we see how extremist forces have risen to power in part due to open-border labor policies designed to benefit large industries but which have fueled social conflict.

It's critical to understand that the government's current approach to labor policy is harmful in the long term — both to our economy and to our national security. Economically, there's no point in dreaming of becoming a new Nordic country if instead of providing retraining and upskilling opportunities to Estonian workers, we continue to erode their rights and feed into low-wage, low-value sectors through the import of cheap labor.

The government is drifting away from the existing European consensus, which aims to build smarter, innovation-driven, higher-value economies that also help reduce growing inequality. Exploiting labor only fuels inequality, whose negative impact on economic development has been well-documented by economists.

When relative poverty affects the working-age population, it influences people's health and risk behaviors, leading to direct costs for the state in healthcare and law enforcement. But even more troubling is when inequality is passed on to the next generation through education.

Next year's Human Development Report will warn of rising educational inequality, where students' academic performance is increasingly tied to their family's income. The Reform Party's push for tax breaks for the wealthy — at the expense of average earners who shoulder national defense costs — won't make us wealthier in the long run. That deepening inequality will affect the children and youth who should become tomorrow's experts, scientists, innovators and entrepreneurs.

Social cohesion and domestic political stability are the foundation of national security. Growing inequality puts pressure on the income and well-being of the average Estonian family. That, in turn, breeds resentment toward the state, boosts support for far-right populists and creates fertile ground for radicalization. When people see no future where honest work can provide a decent living and a place to call their own, it leads to frustration and anger at the system.

Most importantly: Estonia cannot build its development on cheap labor and a simplistic economic model. We will never become prosperous if our competitive advantage is poverty and if we solve social issues not through solutions but by creating more problems.

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