Estonian unions and current crisis
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Transcript of Estonian unions and current crisis
Estonian unions and current crisis
Harri TaligaMay 29, 2009
Unions 2009
• Union density rate – below10%, declining
• 1,5 (?) confederations:– EAKLConfederation of Estonian Trade Unions
re-established in April 1990 (first TUC in 1919)
– TALO (Estonian Employees’ Unions’ Confederation) – split from EAKL in 1993-1994
• February 2009 – Teachers and univeristy teachers unions left TALO
EAKL
• EAKL has 19 affiliates in:– industry – transport – private services– health care– state and local authorities
EAKL (2)
• Central office – 11 employees • 6 regional offices – 7 employees
Central office:• President• Secretaries: organising, legal issues,
wages/negotiations, international• PR-manager• lawyer
Social dialogue
• 1992 April – first tripartite agreement• 1992-2003 – 17 tripartite agreements
– Minimum wage– State unemployment allowance– Basic income tax exemption– Participatory democracy– Guarantee fund– Principles of new Employment Contract Act
Social dialogue (2)
• Spring 2008 – tough tripartite negotiations on new Employment Contract Act
• April 23, 2008 – delegations signed agreement on the Bill– amendments only on tripartite approval– enforcement one year after adoption
• Government broke its word
Bipartite negotiations
• Unions – employers– National: confederations– Branch: sectoral federations/associations– Company: union and employer
• Unions – government– Civil servants’ salaries– Teachers’ salaries
EAKL – Employers’ Confederation
• December 1999 – memorandum • February 2001 – unemployment insurance• March 2001 – social partnership• August 2001 – principles of increasing minimum
wage for 2002-2008• September 2003 – principles of new Labour
Contract Act • Agreements on minimum wage (2002 – 2008)
Collective agreements 2008
• Total coverage – 28%• 1 national agreement• 2 sectoral/branch agreements
– public transport– health care
• Energy, railway, mining covered by company agreements
Unions’ achievments
• Protection of unions’ rights in Employees Representatives Act (12. 2006)
• National minimum wage agreements– 2007: increase by 20% – 3600 EEK– 2008: increase by 20,8% – 4350 EEK– 2009: no increase - 4350 EEK
• ESF money for social partners’ capacity building (2008 – 2014)
Priorities for unions
• Organising and recruiting members• Increasing representativity• Increasing bargaining capacity• Increasing ability to take industrial actions
– 2004 – 2007 EAKL and affiliates organised 14-16 strikes, demonstartions, picket lines every year
– 2008 – warning strike of EMSA
Priorities for unions (2)
• Promote European social model– strong industrial relations – partnership and
workers’ participation– higher labour and social standards– social inclusion– fight against any discrimination
Challenges for Estonian unions
• Reluctance of the state to engage in social dialogue– no real interest in social partners’ involvement– attempts to limit (by amendments to legal acts)
the unions’ influence and to push unions out from the dialogue
GDP growth
• 2000–2007: 8,7% p.a. in average
• 2008: –3,6% (preliminary)
• 2009: –8,5% (MoF) vs –12,3% (BoE)
• 2010: –2,5% (MoF) vs 0,2% (BoE)
GDP growth 1996-2008
5,7%
11,7%
6,7%
9,7%
7,7% 7,8% 7,1% 7,5%9,2%
10,4%
6,3%
-3,6%
-0,3%
-6,0%
-4,0%
-2,0%
0,0%
2,0%
4,0%
6,0%
8,0%
10,0%
12,0%
14,0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Increasing unemployment
• 2000–2007: 9,3% p.a. in average
• 2008: 5,5%
• 2009: 12,2%
• 2010: 15,6%
Employed and unemployed 1998-2008
606,5
579,3572,5
577,7585,5
594,3 595,5
607,4
646,3
655,3 656,5
66,1
80,5
89,9
83,1
63,6
67,2 66,2
38,4
52,2
40,5
32,0
560
580
600
620
640
660
680
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
20
30
40
50
60
70
80
90
100
Employed Unemployed
Inflation
• CPI– 2000–2007: 4,1% p.a. in average – 2008: 10,6%– 2009: 0,7%– 2010: – 0,6%
Wages
• Nominal wages– 2000–2007: 12,5% p.a. in average – 2008: 14,4%– 2009: – 4,4%– 2010: – 2,3%
• Minimum wage– 2000–2007: 14,2% p.a. in average – 2008: 20,8%– 2009: 0,0%
MINIMUM VERSUS AVERAGE WAGE 2000 - 2009
89118
159 172 192230
278 278
28,3 %30,0 %
35,2 %34,1 % 33,3 % 31,9 % 31,7 %
33,6 %
0100200
300400500600
700800900
2000 2002 2004 2005 2006 2007 2008 2009*)
Eur
os
0%
5%
10%
15%
20%
25%
30%
35%
40%
Minimum wage Average wage Minimum vs average
Statutory minimum wages per hour, 2009 in EUR
9,49
8,71
8,65
8,47
8,41
7,2
4,05
3,78
3,67
3,41
2,71
2,1
1,93
1,73
1,7
1,64
1,48
1,4
0,96
0,71
0 1 2 3 4 5 6 7 8 9 10
Luxembourg
Ireland
Belgium
Greece
Malta
Portugal
Czech Republic
Slovakia
Latvia
Romania
Statutory minimum wages per hour, 2009 in PPS
9,03
8,22
8,17
7,95
7,41
6,86
5,02
4,57
4,43
4,07
3,21
2,95
2,71
2,42
2,41
2,41
2,35
2,29
1,62
1,54
0 1 2 3 4 5 6 7 8 9 10
Luxembourg
France
UK
Malta
Slovenia
Portugal
Czech Republic
Estonia
Lithuania
Romania
Policy of the Government
• Autumn 2008: unrealistic 2009 budget bill – adopted in December – GDP increase +2,6%– Spending 98,5 billion kroons (deficit –0,8%)
• February 2009: – Public spending cuts – 6,6 billion kroons– Join Euro in mid-2010
Policy of the Government (2)
• April 2009:– Additional cuts – 8,5 billion kroons– Enforcment of the new Employment Contract
Act, but without of agreed increase of the unemployment insurance benefits
– Euro is not the goal, but additional benefit
Income tax changes
Monthly basic exemption
Income tax rate
2004 1400 EEK 26%
2005 1700 EEK 24%
2006 2000 EEK 23%
2007 2000 EEK 22%
2008 2250 EEK 21%
Unions response
• Cuts are not creating economic growth
• Support of the domestic demand needed– Redistribution of the income tax:
• basic exemption up to 5000 EEK/month• income tax rate up to 26%
• Joining Euro at any costs not acceptable
Unions response (2)
• Social insurance reserves to be used according to their purpose
• Enforcement of the Employment Contract Act– only on agreed in spring 2008 conditions– alternative – new agreement