Estonia's Public Sector Faces Wage Stagnation and Layoffs in 2025

Thousands of public sector workers, including doctors, nurses, teachers, rescue workers, police officers, and border guards, are seeking significant wage increases in 2025. However, Interior Minister Lauri Läänemets and Education Minister Kristina Kallas have cited budget constraints and potential layoffs as reasons why the public sector wage fund is unlikely to increase next year.

Why this matters: The outcome of these negotiations will have a direct impact on the quality of essential services in Estonia, such as healthcare and education, and could lead to a brain drain of skilled professionals. Moreover, the government's response to these demands will set a precedent for future labor negotiations and could influence the country's overall economic growth.

Doctors are demanding a 10% wage increase, with hourly wages rising from €19.70 to €21.70 and higher pay for weekend and night shifts. Nurses are seeking a wage increase to €13.20 per hour, while care workers are asking for €8.40 per hour. Teachers aim to have their salaries reach 120% of the average salary by 2027, with a minimum salary equivalent to the national average.

Rescue workers are requesting a 13% wage increase in 2025, with a goal of earning at least the average salary in Estonia. The Police and Border Guard Board is also seeking a wage increase to at least 1.1 times the average salary by 2027, with a minimum salary of approximately €1,460 per month. "We would like to maintain roughly similar proportions for the next two years," said Katrin Rehemaa, head of the Estonian Medical Association.

Despite these demands, the Ministry of Finance's spring forecast predicts only a 5% increase in average salaries, leaving public sector workers seeking higher increases. This has led to concerns about potential layoffs and recruitment challenges. The Rescue Board had to reduce its salary budget and lay off rescuers due to cutback decisions made in 2022, and is now finding it harder to recruit new rescuers due to low salaries.

"Teachers' salaries must continue to move closer to this average next year, not further away," emphasized Reemo Voltri, head of the Estonian Educational Personnel Union. Margo Klaos, general director of the Rescue Board, stated, "A lifeguard deserves a salary equivalent to at least 1.2 times the average salary." Egert Belitšev, Director General of the Police and Border Guard Board, added, "Today's target is to reach at least 1.1 times Estonia's average wage by 2027."

As Estonia's public sector workers continue to demand wage increases, the government faces the challenge of balancing these requests with budget constraints and the risk of potential layoffs in 2025. The outcome of these negotiations will have significant implications for the country's essential services and the well-being of its public sector employees.

Key Takeaways

• Thousands of Estonian public sector workers seek 10%+ pay rise in 2025.
• Doctors, nurses, teachers, rescue workers, police, and border guards demand higher wages.
• Gov't cites budget constraints, potential layoffs as reasons for limited wage fund.
• Outcome will impact quality of essential services, brain drain, and economic growth.
• Gov't must balance worker demands with budget constraints and layoff risks.