The coronavirus crisis has slowed the growth in wages
Economist at Eesti Pank
Growth in wages continued to slow at the start of this year as the average wage increased by 4.8% over the year. In March, when the labour market was first affected by the coronavirus crisis, the average wage was lower than a year earlier in seven fields of activity out of 19.
The decline in wage growth was affected very much by wholesale and retail, where the full-time equivalent monthly wage was on average 8.7% lower than a year earlier. At the same time the number of full-time equivalent employees in the sector fell by a total of 15%, probably because workloads and the number of workers were reduced. It is probable though that the fall in wages in retail was affected not just by the crisis but also by other factors, as monthly statistics show the monthly wage was already falling in retail in January and February. The coronavirus crisis also affected wages in March in other sectors that were hit harder, such as transportation and storage, and accommodation and catering, but to a lesser degree than retail.
As the measures taken to prevent the spread of the virus affected businesses in April and May even more than in March, growth in wages is expected to remain slow in future. This will probably also be affected by wage compensation, which was set at 70% of the earlier wage to which was added a minimum contribution from the employer of 150 euros. If employers only contribute the minimum amount, it means that wages for workers will decline on average. The compensation programme will have a very large impact because more than 120,000 employees were eligible for it in April, which is a fifth of the waged workers employed in Estonia.
For further information:
Tel: 668 0965,
Mobile: 5697 9146
Email: mart.siilivask [at] eestipank.ee
Press enquiries: press [at] eestipank.ee