Wage pressure on employers increases

29.11.2010, 09:00

Economic recovery means that some sector such as agriculture have started to raise wages. According to recent statistics, wages in the agriculture sector increased 9% year on year. Wages increased 9% also in the mining industry and 4% in the manufacturing industry, writes Äripäev.

Raul Eamets, professor of economics of Tartu University, says that the first to increase prices are export industries and sectors which underwent severe cuts in labour costs. "I believe that agriculture and construction industry have cut wages most so these two are also most likely to see rapid growth in wages."

Eamets added that wages could only grow when the economy recovers. "Employees can expect to see a pay rise only if companies are being more succesful and performing better".

His views are upheld by Toivo Kens, CEO of Viraito that specialises in dairy farming and crop harvesting. According to Kens, the company has been increasing wages between 7 and 8%. "Wages have gone up also because the price of raw milk is different."

Kens said that one problem for the company is that although it pays good salaries to milking operators, it is hard work and people simply don't want to do it. "We offer them a good pay package with benefits, but they are simply not interested," he said.

Ülo Adamson, CEO of Trigon Agri, a dairy group, agrees. "Agriculture is such as sector where it is hard to find employees and therefore companies are ready to accept requests for higher pay."

Adamson adds that Trigon Agri has increased wages in average by a few percentages. "When others cut wages in 2009, we did not so others may be now returning to former pay levels."

"The key is what wil happen with the price of milk since a lot depends on the European price level. Until now, prices in Europe continue growing," he said.