Savings stagnant despite wages growing faster than prices
People perceive price advance as faster than it really is, while salaries are taken to the market as savings are not growing, a recent Swedbank consumer behavior survey finds.
The actual economic situation and people's perception of it differ to a substantial degree, a recent Swedbank survey finds.
More than a third of people (36 percent) said their salary has not gone up in the past year.
Wage advance was perceived as fastest (over 10 percent) by young people (18-29) and well-paid employees. Office workers, public servants and people making over €1,000 a month said their salaries went up by 5-10 percent. Salary advance for unskilled workers was perceived at up to 5 percent. Self-employed people, executives and service or sales workers did not report wage hikes.
Statistics suggests Estonia has experienced rapid and broad-based salary advance. This means all social groups have shared in it across almost all sectors. Salary advance has been more level since Estonia's tax reform.
Similar discrepancies exist between price advance statistics and perceptions. While everyone feels prices have gone up in the past year, 45 percent of people questioned believed annual price advance came to 5-10 percent, while a quarter of people believed prices went up by more than 10 percent.
Price advance is perceived as fastest by non-Estonians, residents of East Viru County and people making under €550 a month. Younger people and those earning a bigger salary perceived price advance of up to 5 percent.
Actual price advance was clocked at 2.4 percent, with entertainment (6 percent) and food (5 percent) prices growing the most. People spend the biggest part of their income – 22 percent – on food.
Statistics suggests wages have grown three times faster than prices, meaning people have more money to spend.
Savings are not growing, despite the salary rally outpacing price advance.
A third of families said their savings have grown a little over the past year, while around 25 percent said they have less money saved than previously.
A tenth of households have no savings and would immediately be in trouble should breadwinners lose their jobs or should an appliance break.
Households that would hold out for less than a month on savings alone made up 10 percent, while 16 percent could survive for a month and 14 percent for two months.
Swedbank said that the difference between reality and perception is created as people feel they can afford to spend more following wage hikes. While spending more money leaves them feeling everything has become more expensive.
Job hunt optimism
If the ratio of wages to price advance leans toward pessimism, it turns out people are groundlessly optimistic when it comes to finding work.
No fewer than 29 percent of people questioned feel they can find a similar job in three months, while 15 percent believe they can do it in a month. Younger people, residents of Tallinn and those making over €1,000 a month are the most optimistic when it comes to job prospects.
At the same time, statistics from the Unemployment Insurance Fund suggest nearly half of all people need six months to find a new job. A quarter of people can find a new job in 4-6 months, while just 10 percent find new employment inside a month.
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Editor: Marcus Turovski