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Many workers deemed essential during the pandemic—such as those in eldercare, supermarkets, and distribution warehouses—are unable to make ends meet even in good times. And during the COVID-19 crisis the threat of serious illness has been added to low pay. Employers have required people to report to work—in meat-packing plants and restaurants—at grave risk to themselves and their families; their only recourse is to walk away from their jobs, risking their livelihoods.
2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Estonia
2018 Article IV Consultation-Press Release; and Staff Report
Effectively addressing low productivity growth and risks to competitiveness requires a three-pronged approach: (i) making growth promotion more effective through oversight of programs by a dedicated productivity unit in the Prime Ministry, better calibrating programs to company's needs, incentivizing take-up, and scaling-up selected programs; (ii) re-anchoring wage developments in fundamentals by moderating government and minimum wage policies and mobilizing additional labor resources for the private sector, including through faster reduction of government employment; and (iii) social security contribution cuts to provide relief from pressures on profitability.