Rejecting the sewing machine, Estonians embrace computers

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Photo: Pm

In 2004, Estonia joined the European Union. Boosted by EU aid, our economic indicators started to even up with these of wealthy states. Over the ten years, a lot has changed in the Estonian life. What, then, has been the impact on economic structure? As attested by Statistical Office labour force studies: though more and more Estonians move from workbenches to office tables, the major employing sectors of economy remain the same.

Lion’s share of Estonians are employed by processing industry, even though the amount had gone down by a tenth, over the decade. The next best employers are trade, education, transport and storage. While the ranks of educators basically remain the same in size, transport and storage has shrunk by 12 percent. In the retail business, numbers of employees have dropped by a whopping 17 percent, while wholesalers are up by 67 percent.

Predictable trends

According to University of Tartu professor Raul Eamets, a man studying the labour market, most of the economic tendencies have been clearly predictable. «The Estonian labour market has followed the developing nation trends. Germany, perhaps, being an exceptions; overall, however, it so tends to be that the more that people are involved in services, the wealthier and more developed the country,» explained Prof Eamets.

The professor listed three reasons for the major changes: wage rise has cut numbers of those involved in cheap labour sectors (textile industry); sectors of economy which were in close trade ties with Russia got a backlash starting with the Bronze Night of 2007 (transport, timber industry); and some sectors just walk in step with economic cycles (building). In addition to that, several sectors have been impacted by automatization.

It is surprising that, over the decade, the amount of Estonians working in industry had only shrunk 11 percent. According to Prof Eamets, this shows that many industries have succeeded – while labour force got more expensive – to start producing more effectively and with greater added value. The steepest drop in employment has hit textile business: in textile productions by 53 (!) percent, in clothing and leather production by 35 percent.

As admitted by Estonian Clothing and Textile Association chairman Meelis Virkebau, while the number of employees is smaller more than twice, the sector’s total turnover has remained almost the same – productivity is up.

In his estimate, the numbers of employees will keep on decreasing, but in a much slower tempo. «On the one hand, the global competition has attacked us all; secondly, and regrettably, cheap labour has disappeared from Estonia now,» explained Mr Virkebau, regarding the textile drop.

Service rising

Remarkable has been the shrinking of staff, over the decade, at food (by 31 percent), furniture and timber industries (26 percent). In production of electrical equipment, however, the amount of workers has almost doubled. Of the larger sectors, employment also increased in computer, electronics and optics industry (19 percent), and in production of metal products (nine percent).

A large part of Estonians still till the fertile native soil; even so, over the decade the ranks of farmers have thinned by 28 percent. According to agriculture ministry vice chancellor Illar Lemetti, there’s been lots of rearrangements in agriculture since Estonia joined the EU, and production has become more effective; by now, however, the amount of those employed has stabilised.

Even today, lots of Estonians earn bread by building – over the past ten years, the amount is up 29 percent. According to Raul Eamets, the numbers of those employed in construction depend on the economic cycle. «When the economy is growing, huge amounts of extra jobs appear there: during the boom times, it jumped from 44,000 to 80,000, and now it fell back to 55,000,» said Mr Eamets.

The fact that ever more Estonians labour in services, is revealed by figures regarding accommodation (employees up 138 percent), in information and communication (86 percent), in areas professional, research-related and technical (71 percent), and in administration/assistance (51 percent).