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Extra money for vacations

  • 2000-08-31
  • Kairi Kurm
TALLINN - For the first time in Estonian history the average wage has exceeded 5,000 kroons ($ 287).

According to some specialists, the wage increase may indicate a boost in the Estonian economy in the near future.

In the second quarter of 2000, the average gross wages and salaries of full- and part-time employees of enterprises, institutions and organizations were 5,031 kroons per month and 28.69 kroons per hour. The average wage in April was 4,628, in May 4,974, and in June 5,548 kroons.

Compared with the second quarter of 1999, the average monthly gross wages and salaries have increased by 10.5 percent and the average hourly gross wages and salaries have risen by 10 percent. Even when inflation is figured in, the increase is still 7.4 percent.

In the past, inflation affected the results greatly. In 1994, for example, the average wage in the second quarter was only 1,741 kroons, but by 1996 it had reached 3,004 kroons.

Mare Kusma, head of wage statistics section at the Statistical Office of Estonia, said that she had predicted the same trend.

"The second quarter was influenced by the vacation pays," she said. "The third quarter is usually a little bit lower."

Maris Lauri, an analyst with Hansapank, said that there are several reasons behind the rise of the average gross wages. One is the recovering economy.

"The number of people working in the lower-paid sectors decreased during the period of the economic slowdown and the productivity increased due to the decrease of these less efficient employees," said Lauri.

She said that the rise in income should boost the economy because people have more money to spend.

According to the statistical office, employees in the financial sector are paid the most. Salaries in this section are 2.2 times higher than the average gross wages in Estonia.

Kusma said that although the financial sector is the best-paid sector, some workers in this business still receive less than the Estonian average.

"The salaries depend mostly on the activities and possibilities of a company. In some companies an office cleaner may receive the Estonian average," said Kusma.

The lowest wages and salaries are in the agriculture and hunting industries. They are about 55 percent lower than average but have increased more than 16 percent compared to the same period last year.

The biggest rise in incomes was in the hotel and restaurant business, where wages increased by almost 33 percent and reached 5,063 kroons per month.

Villu Zirnask, columnist of the daily Eesti Paevaleht, said that the rise in salaries in this sector might indicate a decrease in wages paid "under the table," because sales in the hotel industry increased by only 22 percent and in the restaurant industry by 16 percent in the same period.

According to news agency BNS, untaxed wages are most common in trade and construction businesses.

The biggest drop in wages and salaries was in the fishing industry, where they decreased by about 15 percent and reached only 3,400 kroons per month.

Although the average Estonian wage is only 40 percent to 60 percent of the European Union average, public officials are still doing better than the average Estonian.

In general, the increase in average salaries must have delighted MPs and other public officials most, because their salaries are tied to the national average.

The gross average salary of an MP amounts to four average Estonian salaries combined. With the increase in average incomes, they should get an additional 2000 kroons per month. Together with the 20 percent expense account, an average MP should now receive about 19,000 kroons a month.

The monthly salary of the Estonian president is six times the national average, the business daily Aripaev reported.

Besides the good income, Parliament officials, top military officials and judges receive a good pension after retirement. A pension of a Parliament member is about 75 percent of their previous gross income. As the pension is sometimes higher than the income itself, the government is planning to impose income tax on pensions that exceed 4,000 kroons.

Some people are of the opinion that the salaries of state officials should be tied to the minimum Estonian wage, because this will increase the governors' responsibility for the Estonian living standards.

Although most people think that civil servants are badly paid, the statistics released by Aripaev prove the opposite. According to Aripaev, an average civil servant earned 6,758 kroons a month in ministries and 5,489 kroons a month in county governments in 1999. Extras and bonuses made up about a quarter of their salaries.

The highest earnings are in the Ministry of Roads and Communications, where the average salary is 8,700 kroons, and the lowest are in the Ministry of Foreign Affairs, where it is 5,414 kroons.

Compared to the average Estonian gross wages and salaries, Lithuanians make a little bit more money, and Latvians less, said Kusma.