BONJOUR L'ESTONIE

Estonia simplifies moving of top level specialists to Estonia

The Estonian Riigikogu approved on Thursday of amendments to the aliens law that simplify relocation of highly qualified workforce and scientists to Estonia, reported ERR.

While currently immigrations control is implemented equally to all foreigners, the amendments create more flexible possibilities for bringing persons who add value to Estonia. It also simplifies the stay of family members of foreigners in Estonia.

The law amendments enable Estonian companies to employ a top levels specialist from abroad in a matter of days and the foreigner can apply for a residence permit for it while already being here.

One of the conditions for the simplified rules is that the company has to pay the specialist at least two times the Estonian average wage.

The law also enables foreign students to work while studying in Estonia and foreign students who graduate from a university here can work in Estonia after graduation too

Toomas Hõbemägi

Estonia's monthly wages up 6.3% in a year to EUR 900

According to Statistics Estonia, in the 1st quarter of 2013, average monthly gross wages were 900 euros, an increase of 6.3% year on year. Average hourly gross wages were 5.63 euros, an increase of 9.1% in a year.

Real wages, which take into account the influence of the change in the consumer price index, increased 2.7% in the 1st quarter of 2013. Compared to the same quarter of the previous year, real wages increased for the seventh quarter in succession.

According to the Wages and Salaries Statistics Survey, the number of employees as at the end of March was practically the same as in the same period of 2012.

Compared to the 1st quarter of 2012, the average monthly gross wages increased the most in real estate activities (13.9%) and the hourly gross wages in agriculture, forestry and fishing activities (15.7%). Compared to the 1st quarter of 2012, the average monthly and hourly gross wages decreased only in arts, entertainment and recreation activities (2.0% and 1.0%, respectively).

The average gross wages were 876 euros in January, 882 euros in February and 940 euros in March.

Estonia's unemployment at 10.2% in Q1

According to the Labour Force Survey, Estonia's unemployment rate was 10.2% in the 1st quarter of 2013 year on year and up from 9.3% in Q4.

The estimated number of unemployed persons was 71,000, which was by 7,000 persons more compared to the previous quarter. The unemployment increased among men as well as among women.

The unemployment rate of persons aged 25–49 was 9.9%. The unemployment of persons aged 15–24 exceeded More than half of the 7,000 unemployed persons who were added compared to the previous quarter were under 25 years of age.

The number of the unemployed grew primarily due to the growth of short-term unemployment. The number of long-term unemployed (i.e. people who had been looking for a job for one year or more) remained unchanged (33,000). The long-term unemployment rate was 4.7% in the 1st quarter.

In the 1st quarter, the employment rate of the population aged 15–74 was 60.8%. The estimated number of employed persons was 623,000 and it remained on the same level compared to the previous quarter.

Statistics Estonia has been conducting the Labour Force Survey since 1995 and every quarter 5,000 persons participate in the survey. The Labour Force Survey is carried out by statistical organisations in all the European Union Member States on the basis of a harmonised methodology.

Äripäev publishes "Top 20 best-paying companies in Estonia"

The business daily Äripäev on Tuesday released a list of the companies registered in Estonia with the highest monthly salaries.

The full list features around 330 companies where the average salary is over 1,500 euros a month. The paper published the top 20 online. The list is based on the unconsolidated financial reports for 2011. Below is a list of average monthly net salaries.

1. Eesti Telekom. 10,583 euros, 7 employees. - Holding company for EMT and Elion.

2. Microsoft. 6,114 euros, 17 employees. - Sales and marketing of software, customer support.

3. Tradelex. 4,802 euros, 7 employees. - Wholesaler of artificial rubber. Current primary markets are Poland and China.

4. UPM. 4,493 euros, 12 employees. - Buyer and seller of wood. Seller of various types of paper in the Baltics.

5. Danske Capital. 4,440 euros, 9 employees. - Manager of various investment funds.

Estonians found more jobs abroad than in Estonia in 2012

According to a labour market overview compiled by the experts of the Bank of Estonia, the number of Estonian residents working abroad grew faster than the number of people employed in Estonia throughout the year 2012, writes LETA/National Broadcasting.

Domestic employment rate grew by 2.2% in the year-on-year comparison, by 0.6 percentage points slower than the total employment rate.

According to the central bank, the number of Estonian workers commuting to work abroad is rather high in comparison with the number of those who have definitively emigrated during the past ten years. It is likely that the geographic proximity of Finland and Sweden and the favourable price of ship transport in comparison with air transport has slowed down permanent emigration as has taken place in Lithuania.

According to calculations by the Bank of Estonia, the number of residents of working age last year fell by an estimated 7,390 due to death rate and changes in the population structure and by nearly 5,300 due to emigration. Hence the total population of working age decreased by nearly 12,700 persons.

Estonian Air hands out layoff notices to nineteen pilots

Estonian national carrier Estonian Air that is drastically cutting costs has given 19 pilots layoff notices, writes Postimees.

The airline’s press spokesperson Ilona Eskelinen said that as a result of downsizing the connection network and fewer aircraft, there is less work for all the pilots who are currently employed by Estonian Air.

The layoffs will take effect in June and July, according to the terms of the collective agreement made between Estonian Air and the trade union of pilots. Some have questioned the need for a three-month delay saying that it is emotionally difficult for pilots and a potential risk.

One of the pilots that will become redundant from April 1 is Mart Lubi who is former chief pilot of Boeing and CRJ900. Lubi said that the airline will get rid of its Boeing aircraft so there is no need for Boeing pilots.

Speaking about his future plans, Lubi said that if he wanted to continue as a pilot he would have to go abroad and seek employment in some foreign airline. “We all know how small the Estonian civil aviation market is,” he added.

Estonian Air employs at present 197 people, down from 337 in 2012. The company has at present ten aircraft, two of which will be returned to the leasing company in the next few weeks.

Toomas Hõbemägi

Labour costs to increase in the near future : Eesti Pank

Estonian central bank Eesti Pank said in comments to the March inflation data that labour-intensive services can be expected to become more expensive along with growing wage costs in the second half of the year.

Data from Statistics Estonia show that inflation in Estonia slowed somewhat in March, from 3.7% to 3.5%. Leaving aside the price growth of electricity, the 2.3% increase in the price of other goods and services was relatively modest. One reason behind the slowdown in inflation was the last year’s high reference base for oil prices. As a result, the cost of fuels cheapened by 3.6%. The same factor affected inflation in other euro area countries as well, so Eurostat’s preliminary estimate is that inflation in the euro area slowed to 1.7% in March.

The Estonian CPI rose 0.7% in March compared to February. The price growth of food made up nearly half of the month’s inflation. Seasonal factors caused the price of vegetables and fruit to go up by 9% and alcoholic beverages became 2.3% more expensive. Unprocessed food has been the primary source of price growth in recent months, whereas the cost of processed food even cheapened in March, by 0.7%.

The impact of domestic factors on inflation is likely to increase in the second half of the year. Above of all, labour-intensive services can be expected to become more expensive along with growing wage costs. Eesti Pank forecasts this year’s average HICP growth to be 3.6%.

Estonia registers EU's 2nd largest growth in labor costs

Estonia posted second-highest growth in average hourly labor costs in the fourth quarter of 2012 with 6.7%,according to Eurostat..

Estonia was second only to in Romania (7.6%) and was followed by Bulgaria (5.1%) and Lithuania (5.4%).

Average hourly labor costs in Latvia increased 3.7% in the fourth quarter. Average hourly labor costs increased in all member states for which data are available.

Meanwhile, Lithuania saw a 4.7% increase in hourly labor costs, the fifth largest increase in the EU.

Overall, average hourly labor costs increased 1.3% in the EU, and 1.3% in the eurozone.

Toomas Hõbemägi

"Key problem is gap between high-earners and low-earners"

There has been a recent public outcry over the 6,500-euro monthly salary of Taavi Laur, the new CEO of Enterprise Estonia, or the news that Sandor Liive, CEO of Eesti Energia, earned 150,000 euros last year. In comparison, Prime Minister Andrus Ansip earns just under 4,000 euros a month.

Peep Peterson, the new chairman of trade unions, says that Estonia’s real problem is the huge gap between high-earners and low-earners.

Peterson says that the contrast between those earning top salaries and those who make minimum salary is too stark and that employee wages must catch up with the income of top earners.

“Estonians today are leaving for work in Finland and I have to agree with the opinion of banker Indrek Neivelt that the Estonian tax system must be adjusted so that lower wages are taxed only modestly because it would be an incentive to increase them. My key question is not how much the top people are making, but I would like employees to earn more,” said Peterson.

In Estonia, difference between women’s and men’s wages highest in EU

A recent report of the European Commission says that in Estonia, women’s salaries and wages, on the average, are lower by 27.7% than those of men.

Thus, out of all the EU countries, Estonia is the country with the largest difference in women’s and men’s wages and salaries, the report says.

The country where this difference is the smallest is Belgium, where it makes 10.2%.

On the average, to earn an equal sum of money, a woman in the EU should work 59 days more than a man. In Estonia, the relevant figure is 101 days.

It’s hard for non-Estonians to find work in Estonia

Data reported recently by Statistics Estonia show that in spite of similar education level of non-Estonians and Estonians, the latter still have many more problems in competing with Estonians on the labour market, writes Postimees.

Statistics Estonia collects annually data about the so-called ethnic population (ie people whose both parents are born in Estonia) and immigrants (whose parents have been born abroad).

According to Siim Krusell, chief analyst of Statistics Estonia, there were 797,800 ethnic Estonians and 226,500 immigrants as of 2012. Of the latter, 91,000 had Estonian citizenship.

Nationals of other countries number 134,700, including 66,100 Russian citizens, and persons with undefined citizenship number 59,100.

“By level of education, there are minimum differences between the two groups although, historically, immigrants are trained for a specific profession. However, the biggest problem for non-Estonians is unemployment was 2012. While among the ethnic population in working age, 62% are employed, the percentage is only 57 among immigrants. This is worrying because in 2009, both were at about 57%,” says Krusell.

Bandsmen of Tallinn Philharmonic Hall receive salary increase

Tallinn City Council has confirmed distribution of budget means for the needs of Tallinn Philharmonic Hall, which guarantees growth of the wages of musicians of the orchestra by eight percent, and other employees – by four percent, informed LETA the press-service of Tallinn City.

There are 32.5 positions in Tallinn Philarmony. Salary increase for all people working in the Philarmonic society costs a total of approximately 24,790 euros. The wage increase was approved from January 1, backwards.

Wage increases are planned in various municipality organizations, including museums and youth organizations, teachers, lecturers and cultural organizations' employees.

Estonian philarmonic society performed 61 concert in various regions of Estonia. This year, continuation of existing concerts' series and elaboration of new concerts is planned for Tallinn Philarmonic Hall. Tallinn Philarmonic Hall has been established as the city organization in the year 1994.

Bank of Estonia to raise wages 2%

Estonian central bank Eesti Pank said its personnel costs in 2013 will grow 5.5% from 2012 to EUR 8.6m, announced the bank.

Basic wages will be increased by 2% from 2013.

The bank raised wages also in 2012, by 4%. It was the first time that wages went up since 2008.

The bank said that after the wage increase, its salaries will be comparable with those paid in the Tallinn financial sector.

The wage increase will not apply to wages of the management board that are determined by the supervisory board.

At the same time, the central bank will cost foreign travel and office costs by 3.2% to EUR 1.1m.

The bank’s 2013 budget will be EUR 20.2m which will be 2% more than in 2012.

Estonian hourly wages rise in Q3

The average hourly gross wage for individuals who work in Estonia increased during the third quarter of the year, new data has revealed.

According to Statistics Estonia and reported by Baltic Business News, the average earnings per 60 minutes on the job stood at €5.21 (£4.21) between July and September.

Released last week, the data revealed average monthly gross wages increased by 5.7 per cent and the hourly figure rose by 8.1 per cent compared with the same period of 2011.

In addition, monthly gross wages without irregular bonuses and premiums were up 5.9 per cent during the third quarter, as real payments surged for the fifth consecutive three-month period.

The country's Wages Statistics Survey also highlighted an upturn in employment levels, with the number of workers at the end of September rising 3.8 per cent when compared to the previous year.

Further growth was recorded concerning the average gross wage, which stood at €861 in July, €842 in August and €864 in September.

Estonian low wages have become a long-term risk

Former Swedsbank macroanalyst Maris Lauri wrote in Äripäev last week that Estonia’s stubbornly high unemployment and lack of available workforce is starting to restrict growth.

This is a structural problem, and these are not easy nor cheap to solve. The good news is that this could be Estonia’s chance because most of Europe does not want to admit right now that any changes are necessary.

In market economy, demand and supply are adjusted  through prices.  This is true for all prices, including wages. If employees are unwilling to do the work for a certain wage level, employers must pay more.

Usually entrepreneurs dislike this option because they see it as weakening their competitiveness.

In fact, companies have two options in such cases: to make production more competitive or to stop doing it altogether. Companies that want to survive must constantly change and if some activitity or product is no longer profitable, it must be given up.

Estonia’s average hourly gross wages up 5.7% in a year

According to Statistics Estonia, in the 3rd quarter of 2012, the average monthly gross wages were 855 euros and the average hourly gross wages were 5.21 euros.

Compared to the 3rd quarter of 2011, the average monthly gross wages increased 5.7% and the average hourly gross wages increased 8.1%.

Compared to the 3rd quarter of 2011, the irregular bonuses and premiums per employee decreased 2.3% and influenced the growth of the average monthly gross wages by 0.2 percentage points. The average monthly gross wages without irregular bonuses and premiums increased 5.9%. Real wages, which take into account the influence of the change in the consumer price index, increased 1.9% in the 3rd quarter of 2012. Compared to the same quarter of the previous year, real wages increased for the fifth quarter in succession.

Compared to the 3rd quarter of 2011, the average monthly gross wages increased the most in other service activities (14.4%) and the average hourly gross wages in arts, entertainment and recreation (13.9%). The reason for the increase was the low level of wages in the previous year.

Doctors’ strike squeezes unemployment funds

TALLINN - The Estonian government coalition submitted on Nov. 7 an amendment to the Riigikogu that would reduce the planned increase of unemployment benefits, as it needs to find resources to fund the increase in wages of the medical staff, reports Postimees.

According to a plan that was already approved in 2009, the unemployment benefit was to be increased in 2013 from 65 euros, to a half a minimum wage, or 145 euros a month. According to the amendment submitted by the government on Nov. 7, the increase is being cut to 101 euros.
After the recent strike by doctors and nurses, Social Minister Hanno Pevkur said that the money for wage increases for medical staff will most likely be found by cutting the planned unemployment benefit increase next year. The amendments to the labor contracts law that Reform Party faction chairman Jaanus Tamkivi handed over to parliament proceedings on Nov. 7 confirmed the minister’s plan.

“The bill is caused by the need to find a source for 3.5 million euros that is necessary for the increase of wages of emergency medical staff and healthcare workers financed from the state budget that was agreed upon in October 2012 as the result of the doctors and healthcare workers strike,” Tamkivi said.
“This is the last thing that will be nullified for employees in the labor contract law that was signed trilaterally in April 2008,” said Trade Unions Confederation chairman Harri Taliga. He reiterated that the government changed the planned unemployment insurance compensation rates already in 2009 and this spring, ignoring the agreement.

Tallinn airport considers layoffs

Tallinn Airport announced yesterday that there may be layoffs ahead for its ground handling subsidiary and that expansion plans for a new terminal will be halted for the time being.

The airport blamed declining passenger numbers and Estonian Air's poor financial situation, reported Postimees.

"Unfortunately, the possibility of layoffs taking place is greater than not. We do not yet know when and how many people will be laid off. That will become clear when we have a more detailed understanding of how Estonian Air plans to move forward," Tallinn Airport Chairman of the Board Rein Loik said.

The airport had been planning to build a new terminal, but the project is not justified at the moment with traveler numbers declining, Loik said. Still, plans for the terminal are ready and would take half a year to implement when the opportunity arises, he said.

After the sacking of Estonian Air's CEO last week, the company announced it would cut routes, flights and staff in order to quell financial hardship. Irish budget airline Ryanair has also reduced its flights for the winter season.

100,000 Estonians are out of sight for Unemployment Insurance Fund

Estonian Unemployment Insurance Fund (UIF) board chairman Meelis Paavel said that one of the priorities of the fund in the next 5 years is to bring back to the labour market the around 100,000 people who have become out of sight for the fund, LETA/Public Broadcasting reports.

"This is naturally a big problem for Estonia and that is also one of the priorities of the next five years for the Unemployment Insurance Fund – to bring as many people as possible, who are not employed now, back to the labor market. Since when we look at the tendency of ageing of population, this is a very big danger to our future," said Paavel.

Paavel said that he believes that jobless should be paid a bit bigger benefits by for a shorter period of time. "We all know that to find a job as fast as possible is much better for a person than to stay home on unemployment insurance benefits," said Paavel, adding that there are professional jobless in Estonia and even families with several generations of them.

Juhan Tere

Why Finns earn four times more an hour than Estonians ?

Estonian economist Andres Arrak writes in an opinion article in Delfi that Estonians like to compare themselves with other European nations and to measure their economic success or failure.

For instance, a comparison of GDP per capita shows that Europe’s richest country in 2011 was Luxembourg with USD 81,100, while Finland’s figure was USD 36,700 and Estonia’s was USD 20,600 per person.

Estonians are finding only a small consolation in the fact that Lithuania’s figure was USD 19,100 and Latvia’s one was even smaller, at USD 15,900.

Does it mean that the living standard of Estonians is four times lower than that in Luxembourg and twice lower than in Finland?
Of course not - anyone who travels knows that living standards in Baltic states, Finland and Luxembourg are not so vastly different.

But why people north and west of Estonia earn several times more for same type of work? Why so-called economic refugees keep leaving Baltic states to become nurses, doctors, bus drivers or construction workers in the West?

One thing that has always struck me is that for some reason Estonians still look down to Russians who live in Tallinn’s Lasnamäe and in 1970s or 1980s moved to Estonia from the rest of the Soviet Union for exactly the same reason.