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Trade unions and employers to sign minimum wage agreement on Thursday

Peep Peterson (right) with ERR's Ainar Ruussaar, Oct. 25, 2017.
Peep Peterson (right) with ERR's Ainar Ruussaar, Oct. 25, 2017. Source: (ERR)

According to chairman of the Estonian Trade Union Confederation Peep Peterson, raising the minimum wage to €1,000 per month isn’t currently realistic, though several politicians and businessmen have suggested such a step. The 2018 minimum wage will most likely be set at €500 gross per month.

The Estonian Employers’ Confederation and the Estonian Trade Union Confederation are planning to sign an agreement on Thursday on the minimum wage. In Estonia, the minimum wage is subject to an annual agreement between employers and employees, not a law.

The minimum wage will likely increase to €500 next year. “The agreement stands,” Peterson told ERR on Wednesday, adding that the trade unions would like to see the minimum wage to be raised by €40 a year, but that €500 was currently the employers’ best offer.

In 2017, the minimum wage stands at €470 gross. In 2016 it was at €430, in 2015 at €390, which means that over the last two years it actually did increase by the €40 a year the trade unions wanted to see.

Peterson explained the employers’ lack of readiness to pay €40 more this year with the recently lower productivity.

Several politicians and entrepreneurs have called for a minimum salary of €1,000 a month, for example former banker and Hansapank founder Indrek Neivelt and former Center Party chairman Edgar Savisaar.

“Politicians have aimed for large sums, but such a proposal needs to become a reality as well, and the negotiations are still between the trade unions and the employers. €1,000 isn’t currently realistic, though we’re likely headed that way,” Peterson said, adding that at the moment such a minimum wage would only be imaginable in Tallinn, but not elsewhere in the country.

A minimum wage of €500 was very good in the Eastern European comparison and only beaten by Slovenia with its €700, and the main reason why Slovenia was doing so well was because it was close to Germany and Austria, Peterson said.

He also explained that the trade unions wouldn’t pursue an aggressive course in their negotiations with the employers. “A trade union doesn’t have to be the enemy of the employer,” Peterson said. “We can work in such a way that the employers are happy and the employees are even happier.” The idea wasn’t that the employers should fear the trade unions, but that they should respect them, he added.

This was all the more important as loyalty towards the employers had recently been on a downward trend. “In some cases people run elsewhere for as little as ten euros,” Peterson said.

Editor: Dario Cavegn

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