Ärten Ross: Labour Market Flexibility Helps Estonian Employment Rate
Märten Ross, Deputy Governor of Eesti Pank, gave a presentation "Monetary Policy and Income Inequality - Some Observations" at the conference "The Day of Dignified Work" organised by the Confederation of Estonian Trade Unions. In his speech Ross provided an overview of the formation of employment and wages in recent years."The rapid economic growth that followed Estonia's accession to the EU was accompanied by several positive effects: many people found a job and wage growth picked up. This was due to both the lack of labour force and the opening of the labour market. However, a precondition for a steady real income growth is equally growing productivity. Otherwise wage growth will bring along an excessive increase in prices, which are already under pressure because of the global price hike of commodities. Both wage and price pressures are subduing now, but if we want to continue to maintain employment and limit inequality, it is necessary to keep the labour market flexible and the monetary policy tuned to reducing inflation. Estonia's monetary policy is considered reliable. According to the barometers of the Estonian Institute of Economic Research, people expect inflation to drop during the next 12 months," said Ross.