Average monthly salary was 900 euros in 1stQ

According to Statistics Estonia, in the 1st quarter of 2013, the average monthly gross wages and salaries were 900 euros and the average hourly gross wages and salaries were 5.63 euros. Compared to the 1st quarter of the previous year, the average monthly gross wages and salaries grew 6.3% and the average hourly gross wages and salaries 9.1%.

The average monthly gross wages and salaries without irregular bonuses and premiums increased 6.5%. Real wages, which take into account the influence of the change in the consumer price index, increased 2.7% in the 1st quarter of 2013. Compared to the same quarter of the previous year, real wages increased for the seventh quarter in succession.

According to the Wages and Salaries Statistics Survey, the number of employees as at the end of March was practically the same as in the same period of 2012.

Compared to the 1st quarter of 2012, the average monthly gross wages and salaries increased the most in real estate activities (13.9%) and the hourly gross wages and salaries in agriculture, forestry and fishing activities (15.7%). Compared to the 1st quarter of 2012, the average monthly and hourly gross wages and salaries decreased only in arts, entertainment and recreation activities (2.0% and 1.0%, respectively).

The average gross wages and salaries were 876 euros in January, 882 euros in February and 940 euros in March.

In the 1st quarter of 2013, the employer’s average monthly labour costs per employee were 1,220 euros and the average hourly labour costs were 8.03 euros. Compared to the 1st quarter of 2012, the average monthly labour costs per employee increased by 6.3% and the average hourly labour costs by 8.7%.

Compared to the 1st quarter of 2012, the average monthly labour costs per employee increased the most in real estate activities (13.7%) and the average hourly labour costs in agriculture, forestry and fishing activities (15.7%). Compared to the 1st quarter of 2012, the average monthly labour costs per employee and the hourly labour costs decreased only in arts, entertainment and recreation activities (2.2% and 1.3%, respectively).

In the 1st quarter of 2013, the average monthly gross wages and salaries in public sector were 918 euros and in private sector 894 euros. Compared to the 1st quarter of 2012, the average monthly gross wages and salaries in public sector increased by 6.3% and in private sector by 6.4%. Public sector also includes companies owned by the state or local government.

Statistics Estonia conducts the Wages and Salaries Statistics Survey on the basis of international methodology since 1992. In 2013, the sample included 11,592 enterprises, institutions and organisations. The average monthly gross wages and salaries have been given in full time units to enable a comparison of different wages and salaries, irrespective of the length of working time. Calculations of the monthly gross wages and salaries are based on payments for actually worked time and remuneration for time not worked. The hourly gross wages and salaries do not include remuneration for time not worked (holiday leave pay, benefits, etc.). In short-term statistics, the average gross wages and salaries are measured as a component of labour costs. Labour costs include gross wages and salaries, employer’s contributions and employer’s imputed social contributions to employees.

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Source: Statistics Estonia

Youth unemployment 23,1 pct in Estonia

Youth unemployment  is 23.1% in Estonia and 22.2% in Latvia.

In the EU, the highest youth unemployment rate is in Spain (55%).

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The unemployment rate was 10.2 pct in the 1st quarter

According to Statistics Estonia, the unemployment rate was 10.2% in the 1st quarter of 2013. The unemployment decreased compared to the 1st quarter of the previous year but increased compared to the previous quarter. The unemployment of young people aged 15–24 increased more rapidly.

According to the data of the Labour Force Survey, the unemployment rate was higher than in the previous quarter, when it was 9.3%, but lower than in the same quarter of the previous year (11.5%). The estimated number of unemployed persons was 71,000, which was by 7,000 persons more compared to the previous quarter. The unemployment increased among men as well as among women.

The number of the unemployed was primarily affected by the increased economic activity of the population and not by the decreased employment. The number of economically inactive persons (not working nor looking for job) decreased.

By age groups, the unemployment was the smallest among elderly people (aged 50–74) (6.9%) and their participation on the labour market increased compared to the previous quarter. The unemployment rate of persons aged 25–49 was 9.9% and it increased slightly compared to the previous quarter. The unemployment of persons aged 15–24 exceeded the unemployment of elderly people by several times. More than half of the 7,000 unemployed persons who were added compared to the previous quarter were under 25 years of age.

Although the majority of people aged 15–24 (61%) are economically inactive (mainly due to studies), unemployment has always been bigger among the youth than among older people. Some of the reasons are lower qualifications and less job experience of people under 25. The youth unemployment rate or the share of unemployed persons aged 15–24 among the labour force of the same age was 23.1%, which is bigger compared to the previous quarter as well as to the same quarter of the previous year (then the youth unemployment rate was 16.9% and 22.7%, respectively). Among persons aged less than 25, the estimated number of employed persons was 51,000 and the number of unemployed persons – 16,000.

The number of the unemployed grew primarily due to the growth of short-term unemployment. The number of long-term unemployed (i.e. people who had been looking for a job for one year or more) remained unchanged (33,000). The long-term unemployment rate was 4.7% in the 1st quarter.

In the 1st quarter, the employment rate of the population aged 15–74 was 60.8%. It decreased slightly (by 0.2 percentage points) compared to the previous quarter. The estimated number of employed persons was 623,000 and it remained on the same level compared to the previous quarter.

The employment of females slightly increased as the employment of males decreased. There was a remarkable decline in the number of persons employed in construction, working both in Estonia and abroad.

The share of economically inactive persons (students, retired persons, homemakers, discouraged persons, etc.) in the population aged 15–74 decreased. It was 32% in the 1st quarter, i.e. 330,000 persons, which are 5,000 persons less than in the previous quarter. Among inactive persons, the number of persons inactive due to health problems decreased the most.

In the calculation of the estimates for 2012 and 2013, the estimated number of population published by Statistics Estonia as of 1 January 2012 has been used to ensure the comparability in time series; this population figure has not been adjusted with the data of the 2011 Population and Housing Census. The Labour Force Survey data for 2000–2013 will be adjusted after the revision of the population number during the years between the two censuses and will be published in the 1st quarter of 2014.

Unemployment rate is the share of the unemployed in the labour force (the sum of the employed and unemployed persons). Long-term unemployment rate is the share of people who have been unemployed for a year or longer among the total labour force. Employment rate is the share of the employed in the working-age population (aged 15–74). The estimates are based on the data of the Labour Force Survey. Statistics Estonia has been conducting the Labour Force Survey since 1995 and every quarter 5,000 persons participate in the survey. The Labour Force Survey is carried out by statistical organisations in all the European Union Member States on the basis of a harmonised methodology.

See graph here

Source: Statistics Estonia

Decelerating economic growth slowed employment growth

Data from the Statistics Estonia labour force survey show that employment rate increased in the first quarter of 2013 to 60.8%, meaning that in the first quarter of 2013 the number of people employed was 1.4% higher than a year earlier. However the Statistics Estonia survey is based on population figures that are not adjusted for migration, meaning they may overstate the figures for the employed and the unemployed, though the ratios of the employment and unemployment rate are not significantly affected.

The growth in employment started to slow in the second half of 2012, and this continued in the first half of this year as economic growth decelerated. Weak external demand has, for example, suppressed employment in manufacturing. The long winter delayed the start of building projects, which was reflected in a fall in employment in the construction sector. The shrinking of the working age population puts ever more limits on ways for employment to grow, and in that sense it is a very positive thing that the labour force participation rate remains high, standing at 67.7% in the first quarter of 2013.

The unemployment rate fell from 11.5% in the first quarter of 2012 to 10.2% in the first quarter of 2013. Although the number of the unemployed increased compared to the previous quarter, this was due to seasonal factors and underlying unemployment continued to decline. Long-term unemployment fell more sharply, and the share of the long-term unemployed decreased to 46.5% of the total. Data from Eesti Töötukassa, the Estonian unemployment insurance fund, show that the number of registered unemployed has fallen steadily throughout the year, albeit at a slowing rate. The number of the discouraged has also declined over the year.

Source: Bank of Estonia

Author: Natalja Viilmann, Economist at Eesti Pank

Latvian companies pay low salaries

Latvian investigative journalism company Re:Baltica claims that Latvian businesses tend to pay inadequately low salaries to their workers while providing them little social security or even decent working conditions, reports news2biz LATVIA..

The investigation focuses on two companies: locally-owned fish processor Gamma-A and Lithuanian-owned supermarket chain Maxima. With some 7,500 workers, Maxima is one of the largest Latvian employers.

Any mistakes or missing money had to be covered by the worker herself, even though the salary barely reaches above substinence level; having worked slightly more than a month, including lots of overtime, the journalist received LVL 280 (400 eur). Without overtime, the salary could be as low as LVL 230 a month.

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Eesti Telekom, Microsoft Estonia top the executive pay list

According to a pay survey made by Äripäev, the highest executive monthly pay in 2011 was in Eesti Telekom and Microsoft Estonia, which paid their executives in average 10,583 euros and 6,114 euros a month. The highest-earning executive in 2011 was Vladimir Volohhonski, founder of fertilizer terminal DBT who made over 70,000 euros a month.

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Estonians are selling their work too cheaply

Public relations expert Janek Mäggi writes in Äripäev that Estonians need to ask a better price for their work because this is the only way to increase people’s wealth.

Mäggi says that he remembers back in 2007 that when a waste management company was looking for hire waste truck drivers and offered them the equivalent of 2,000 euros a month, it still could not find anyone interested. Today, waste truck drivers in Estonia only dream about such salaries.

Average wages in Estonia are too low, keep purchasing power down and are causing social tension. Salaries are so low because the work is too cheap. Wages and prices are directly linked. Once a hairdresser’s saloon doubles the price, it can pay twice higher salaries. However, the problem is that the owners know that if they increase prices, but keep wages unchanged, they will double their profit.

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The challenges ahead are a declining population

Growth accelerated in Estonia in the second half of 2012 driven by domestic demand, and this was reflected in the labour market, as the share of the service sector in employment increased. Confidence indicators from our largest trading partners show that the outlook for the exporting sector has improved in recent months.

The unemployment rate also dropped in the second half of 2012, with the number and share of the long-term unemployed both falling. Unemployment is structural in nature and this is reflected in the continuing large differences in unemployment levels between regions and educational levels. A high level for natural unemployment is not inevitable. It is important for the state to use labour market and social policy levers to reduce obstacles to finding employment for the unemployed and those who have left the labour market.

The existence of sufficiently qualified labour resources is ever more important for the longer-term development of the economy. Preliminary estimates suggest that the working age population shrank during 2012 by almost one percent. Longer-term population forecasts are more pessimistic than earlier ones because of the high emigration by young people during the past decade. This means that even if the birth rate rises, the number of births will be lower, and there will be fewer young people reaching working age.

The decline in the population and labour force are processes that cannot easily be reversed. For this reason, more focus than ever needs to be put on developing the economy in a way that favours the creation of jobs with higher added value. This means encouraging life-long learning, effective cooperation between the education system and employers, and policy measures that favour the mobility of the labour force.

Source: Bank of Estonia

Authors: Orsolya Soosaar, Natalja Viilmann from Bank of Estonia

Every tenth Estonian is a manager

According to the data of the 2011 Population and Housing Census (PHC 2011) of Statistics Estonia, 67% of persons employed in Estonia worked in service sector, 29% in industrial sector and only 4% in primary sector.

Compared to the previous Population Census, the number of  persons employed in service sector has increased by nearly 43,000 persons, but  the primary sector (agriculture, hunting, forestry and fishing) and industrial  sector have both lost over 10,000 workers.

As of 31.12.2011, 561,138 persons employed were enumerated in Estonia.  Although the population number has decreased compared to the previous Census,  the number of persons employed has increased over 16,000.

As by sectors among residents of Estonia most persons employed are  engaged in service sector (372,840), then by economic activities, similarly to  the previous Census, manufacturing was holding the first position with regard  to the number of employees and their proportion. In 2011, 18% of the total  number of persons employed worked in manufacturing, in 2000 – 22%. Of branches  of industry, the majority of labour force is used by manufacturing of food  products, wood industry and manufacturing of metal products. 55% of persons  employed in manufacturing are males and 45% females. The share of the employees  of this economic activity is the biggest among inhabitants of Lääne-Viru  county.

The youngest age group under observation in the Census (persons aged  15–19) are mostly engaged in trade and accommodation. Elderly people (aged over  60) are mostly working in the field of education and health. Compared to the  2000 Population Census, the share of employees in the field of education and  health has slightly increased among persons employed, accounting for 9% and 6%,  respectively.

8% of persons employed are engaged in construction activities and 14% in  wholesale and retail trade. Compared to the 2000 Census, the share of persons  employed has slightly increased in both economic activities. The share of  builders in employment is slightly bigger in Järva, Rapla and Saare counties.

Compared to the previous Census, more people are working in the field of  information and communication (3% of persons employed) and the share of persons  who are engaged in arts, entertainment and recreation activities has also  increased (2.5% of persons employed). About 10% of persons employed in rural  areas and 1% of persons employed in urban areas work in agriculture. The share  of persons engaged in agriculture is the biggest in Jõgeva county.

The most wide-spread occupations are shop-assistant (26,155 persons  employed), sales representative (16,236), truck-driver (15,602), general  builder (13,112), book-keeper (11,171) and teacher of higher level in general  education school (9,857).

Of occupational groups, the number of professionals is the biggest  (18%). There are 10% of managers and nearly 6% office clerks. The share of  military personnel is the smallest (less than 2%).

For nearly 40% of the whole population in Estonia  the main source of subsistence are earnings. 25% of the population were  dependants (children, but also other persons mainly maintained by family  members). The main source of subsistence for 24% of population is pension and  less than 1% is maintained by institutions. The main source of subsistence for  2% of the population is entrepreneurial income and for 4% supports and  benefits. In case of 4% of the population the source of income is unknown or it  is other income (property income, agricultural holding or loan). Compared to  the previous Census, the share of persons living on paid employment and  entrepreneurial income has slightly increased.

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27 pct of men and 39 pct of women in Estonia have higher education

According to the data of the 2011 Population and Housing Census (PHC 2011), 34% of the Estonian population aged 20 and over have higher education, 45% have upper secondary education and 21% have lower secondary education or less.

Compared to the previous census of 2000, the share of persons with higher education has increased by eight percentage points, the share of persons with upper secondary education has remained the same and the share of persons with lower secondary education or less has decreased by seven percentage points. Among the population aged 20 and over, 342,289 persons had higher education in 2011, 455,280 had upper secondary education and 214,076 had lower secondary education or less. The level of education was unknown in case of 1.5% of the population aged 20 and over.

Among males aged 20 and over, 27% had higher education, 49% had upper secondary education and 24% had lower secondary education or less – the respective shares among females were 39%, 42% and 19%. Compared to the previous census, there has been an increase in the share of males and females with higher education and a decrease in the share of males and females with lower secondary education or less.

The results of the 2000 census showed that people with a higher level of education tended to live in cities. This trend had changed by the time of the 2011 census, although the urban population still had a higher share of people with higher education. Among the rural population, the share of persons with higher education was 26% (16% in the 2000 census) and the share of persons with lower secondary education or less was 29% (42% in the 2000 census).

In both 2011 and 2000, 99% of 7–14-year-olds were studying. In other age groups, the share of persons studying was higher in 2011 than in the 2000 census. Their share was 89% among 15–19-years-olds (85% in 2000), 45% among 20–24-year-olds (33% in 2000), 17% among 25–30-year-olds (10% in 2000) and 2% among those aged over 30 (1% in 2000).

Higher education – professional higher education, Bachelor’s degree, higher education obtained on the basis of a curriculum used before 1992, Master’s degree or equivalent, doctorate (incl. former Candidate of Sciences).

Upper secondary education – upper secondary education, upper secondary education with vocational education, post-secondary non-tertiary education.

Lower secondary education or less – less than primary education, primary education, vocational education without lower secondary education, lower secondary education, lower secondary education with vocational education.

The schedule of publication of the results of PHC 2011 is available on the website http://www.stat.ee/phc2011.

The eleventh population census in Estonia was conducted from 31 December 2011 until 31 March 2012. Previous censuses were carried out in 1881, 1897, 1922, 1934, 1941, 1959, 1970, 1979, 1989 and 2000. The next population census in Estonia will be conducted in 2020/2021.

Source: Statistics Estonia