The coronavirus crisis slowed the growth in wages
Economist at Eesti Pank
Data from Statistics Estonia show that the average wage was 1% higher in the second quarter than it was at the same time a year earlier. The seasonally adjusted average wage was lower than in the first quarter. The lowest point in the first half of the year was reached in May, and wages started to rebound in June.
The data from Statistics Estonia show that the average wage fell the most in retail and in accommodation and food service, which were affected most directly by the measures taken to stop the spread of the coronavirus. The average wage also fell in manufacturing, which was affected by the performance of Estonia’s export partners. The change in the structure of employment had a positive impact on the average wages in the second quarter. This is because the biggest reduction in the number of jobs caused by the coronavirus crisis was in the service sector, where the average wage was below the average for the whole economy. If the structure of employment had remained unchanged across sectors, the average wage would have been the same as a year earlier.
The monthly data published by Statistics Estonia, the data from the Tax and Customs Board on the average wage paid out, and confidence levels at companies point to an improvement in the labour market over the summer months. The biggest risks going forward come from the further spread of the virus and measures taken to prevent it both in Estonia and in foreign trading partners.
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