Tarmo Kriis, assistant to the managing director of the Employers and Industry Central Union, said that the union was going to decide upon the proposal Nov. 3.
"We did not come to a consensus," said Kriis. "The current score is 2-1. Our last proposal was to increase the minimum wage to 1,550 kroons ($82)."
He said that originally the government wanted to keep a distance from the negotiations and accept the employers' and the trade unions' final decision, but as these two did not come to a joint conclusion, the government stood on the trade union's side.
"Whether we get the trilateral agreement or not, the government has the right to set the state minimum monthly wage at 1,600 kroons without our proposal," said Kriis.
The negotiations between the two parties started in summer, said Kriis. He said that the preliminary proposal of the trade unions was to increase the minimum wage level to 1,650 kroons but the employers had agreed to a 1,500 kroon level. Last week both sides came closer to each others proposals. The employers agreed to a 1,550 kroon level and the trade unions to 1,600 kroons.
The trade unions declared they rejected all further compromise talks and if the employers did not stick to the 1,600 kroon level they would start a nationwide strike or close railway traffic.
Harri Taliga, social secretary of the Confederation of the Estonian Trade Unions, said that the minimum wage was not enough for living after taxes had been paid but it was bigger than a pension.
"It is not reasonable that a working person gets less than a pensioner," said Taliga. The average pension in Estonia is 1,551 kroons. According to the daily Eesti Paevaleht there are 110,00 people in Estonia who receive a minimum wage. Tali estimated that about 7 percent of all employees in Estonia receive the minimum salary of 1,400 kroons.
Tali said that the increase in the minimum wage level will bring along more taxes to the government and many people who received pocket money would have to declare higher wages.
"The increase in minimum wage brings along a lot of problems for employers. In many companies the minimum wage is included in the wage payment index and a small rise in minimum wage will bring along big costs to a company. So the companies were allowed to alter their wage payment indexes," said Kriis.
Kriis said that the wage payment index of the textile company Kreenholm for example is bound to the minimum wage and the company would lose 38 million kroons because of the new wage level and be forced to dismiss 300 people. The trade unions and Kreenholm agreed that the company would remake their wage payment index by the year 2002 and would increase the minimum wage by 9 percent.
The minimum wage will also affect the wages in the public sector. Kriis said that according to the preliminary calculations the new minimum wage level will bring along 100 million kroons of additional costs to the state.
Besides the public sector and some big industries, the rise in minimum wage will also affect many people through fines, which are bound to the wage level.
Kriis said that the other motive behind turning down the trade unions' proposal was the imbalance in the rise of minimum wage compared to the rise in an average wage. The average wage in Estonia is about 5,000 kroons per month.
"If we would not fight for a rise in minimum wages the average wage would go far ahead and the society would stratify into poor and rich people," said Taliga.
"Some predict that the average wage will increase by 6 percent next year. But the rise in the minimum wage is about 14 percent. If the productivity does not increase that much, how is it possible to raise wages," said Kriis. "By the first half of 2001 we should come up with a formula to calculate minimum wages because it should not be set up on emotions."