Estonia: minimum wage to rise by 11% in 2023

On 05 September, Estonia’s social partners agreed on an increase in the national minimum wage for 2023. This will rise from €654 currently to €750, representing an increase of 10.9% and translating into a 39.3% rise in the average wage as forecast by the Estonian Ministry of Finance for 2023. Amid extraordinarily high inflation (almost 25% in August), indeed the highest in the Eurozone, the trade unions had launched a petition at the beginning of June to collect signatures for an increase in minimum wage and the tax-free minimum income to €700. Around 18,000 Estonians, or 3% of the country’s employed population, are expected to benefit from the increase. The leader of the Central Employers’ Union, Arto Aas said in a press release that this move represented a compromise, “The rapid increase in prices and energy costs is putting our entrepreneurs under great pressure, which unfortunately does not contribute (positively) to the competitiveness and confidence of the Estonian business environment. At the same time, it is clear that low-income workers need more support to cope with the rapid inflation, and in our already tight labour market, every pair of hands has a high price.”