Wage gains expected in tight labor market

  • 2012-05-30
  • From wire reports

Wage growth reached 6.9 percent in Q1.

TALLINN - Wage growth is possible in Estonia this year, especially in those sectors that lack experts, says Swedbank, reports LETA. The Swedish bank expects real gross wages to grow 1.8 percent on average this year.
Future wage developments will continuously be impacted by the labor market situation - in certain sectors the shortage of skilled workers can push up wage growth, even above productivity gains. However, slower productivity growth and companies’ wish to maintain their cost effectiveness will have a dampening effect.

The average monthly gross wage increased by 6.9 percent y-o-y in the first quarter. The real growth of gross wages accelerated to 2.4 percent. The strongest growth was reported in energy supply and construction activities.
According to Statistics Estonia, the average monthly gross wages and salaries were 847 euros, and increased by 6.9 percent in the first quarter of 2012 as compared to the first quarter of the previous year. Compared to the first quarter of 2011, the irregular bonuses and premiums per employee grew 20.5 percent and influenced the growth of the average monthly gross wages and salaries by 0.5 percentage points.

The average monthly gross wages and salaries without irregular bonuses and premiums increased 6.4 percent.
The real wages, which took into account the influence of the change in the consumer price index and which shows the purchasing power of wages and salaries, increased 2.4 percent in the first quarter of 2012. Compared to the same quarter of the previous year, the real wages increased for the third quarter in succession.
Nonetheless, disparities exist. The average working week of men is three hours longer than that of women in Estonia while a half of males employed, and a third of females employed, work overtime, Statistics Estonia’s publication “Time Use of the Population of Estonia,” published on May 28, indicates.

In the Time Use Survey 2010, the actual working hours of employed persons were surveyed during one week. The results of the survey show that 26 percent of employees worked for 35–40 hours a week, which could be regarded as standard full-time work. Forty-two percent of employed persons worked more and 32 percent less than that.
On average men worked three hours and six minutes longer a week than women. The reason for this is partly that women are more likely to have part-time jobs; also, it is usually women who stay at home to care for sick family members.

Employees with primary and basic education spent on average 3 hours and 20 minutes more per week on work than employees with higher education. The working week was longer in agriculture, trade, hotels and restaurants, and in transport and construction activities.

Overtime work (over 40 hours a week) was performed by 42 percent of employed persons and 13 percent of employed persons had an extremely long working week (over 48 hours). Forty-nine percent of male and 37 percent of female employees worked overtime. Every sixth male and every tenth female employee worked over 48 hours a week. The young employed and the employed with a lower level of education have a greater risk of long working hours.

Three-quarters of employees start their workdays between 7 a.m. and 9:30 a.m. Eight o’clock is the most common time for starting workdays as 38 percent of the employed start work at that time. Thirteen percent of employees start work at 9 o’clock. The most common end time of work is 5 p.m., when 24 percent of employees finish their daily work. Different from the start of the workday, the end times of workdays are still dispersed over a longer period. For example, every tenth employee is still at work at 8 p.m.

The Time Use Survey was conducted from April 2009 to March 2010 and it covered 7,000 respondents. The analysis of working hours is based on Time Use Survey weekly diaries, where the respondents were asked to mark their actual working hours during one week.