Monday, October 22, 2007

Latvian wage growth

On August 31st Latvia published its statistics on wage growth. The average growth as compared to Q2 2006 was a stunning 33,2%. Great for all those wage earners, a terrible blow to the competitivness of the country. Interestingly the leader in the wage growth was public sector with 37,1% wage growth compared to 32,4% in private sector. Why is Latvian government increasing the public sector wages so quickly at a time when the crucial point for the government should be stopping the overheating of the economy? Because the public sector wages have been low and stagnant for years? Hardly so. The public sector workers earned on average 30% more than workers in private sector (not adjusting to anything). This also disagrees with the common hypothesis that a big reason for Latvian wage growth is legalizing wages, i.e. people who used to earn only minimum wages officially and got the rest in envelopes, now get bigger share of their income officially, so according to the statistics their wages seem to be increasing. Assuming that the public sector has been paying their wages correctly all the time, such "cleaning" of the wages should only affect the statistics of the private sector.

Thursday, October 18, 2007

Some readings from couple of weeks ago - saving Africa and/or saving homeowners

Gregory Clark discusses saving Africa. Do we help African countries by giving them more and cheaper medicine, better-yielding crops or do we actually condemn them for eternal poverty by doing that. Should we see infant mortality as part of the problem or as part of the solution?

Tallinn's mayor and the leader of Keskerakond Edgar Savisaar is not alone in rushing to bail out not-performing home loans. He has a lot of soul-mates on the other side of the Atlantic. Read here and here. Interestingly none of these ideas makes much sense. Or am i just reading the wrong sort of blogs?

Wednesday, October 17, 2007

I.Padar ja Valgevene

Tänavusel Pärnu juhtimiskonverentsil esines Ivari Padar ettekandega - "Riik kui hea peremees". Mind teeb aga rahutuks küsimus - miks oli presentatsiooni taustana kasutatud Valgevene lipuvärve? Kas see vihjab rahandusministeeriumi/valitsuse/sots.demide arvamusele, et ka Eestis peaks (Valgevene eeskujul) riigil olema suurem roll majanduse juhtimisel, sest riik on hea peremees? Mis üldse tegelikult toimub?

Wednesday, October 10, 2007

Inflation and employment

A very, very, very good and critical post on Estonian economy.

It is worthwhile noting that as
  1. there are very limited opportunities for further growth in total employment (there is practically no people without work left) and
  2. our competitiveness falls as wages grow quicker than productivity and
  3. the government is not willing to let in immigrant workers,
then we clearly run into problems in keeping up the growth. I expect the EU funds to help to postpone the problems for a couple of years and help to bring about the soft landing, but the remedy of excess funding to a country with significant capacity problems is definitely questionable as Edward Hugh notes. We might just get even higher wages and more employment in construction sector increasing the problems for all exporting industries. So once the EU money runs out (in 2013), we really need to think how you make all those brick-layers into competitive and innovative entrepreneurs. By that time half a generation has grown up where doing simple jobs on a construction site earns you much more than working in any intellectually demanding work (but hey, at least we don't have any Ukrainian temporary workers here).

Adding to that, i see problems facing us also from the demand side. If you are in an industry who targets people in ages 20 and over, the hard times start arriving in 2010. Up until 2009 each year gives you 24 000 new potential customers, the number starts falling in 2010 and in 2018 you have to get your bucks from only 12 000 new clients. As you see, this coincides with the fall in demand from EU money. What this really means to the economy... well, i don't know. We'll see...

Monday, October 08, 2007

Pensionisüsteemi reformist

Tänases Postimehes käib Indrek Holst SEB-st välja tööandjapensioni idee. Viidates inimeste hoolimatusele oma tulevase pensioni suhtes (kaks esimest sammast tagab pensionina vaid ca. 40% inimese viimasest palgast, aga kolmanda sambaga on liitunud ainult viiendik inimesi), soovitab Holst rakendada tööandjapensionit ehk võimalust panustada ettevõttel töötaja kolmandasse pensionisambasse. Nagu ta ütleb, oleks tööandjapension vabatahtlik ning osa firmade motivatsioonivahenditest.
Idee tundub pehmelt öeldes vildakas - soovitada ettevõtetel kasutada motivatsioonisüsteemina väärtust, mida hindab ainult 20% töötajatest. Ilmselgelt mõjusam motivatsioonihoob oleks suurem krediitkaart või lisalaen kallima kinnisvara soetamiseks. Või siis vähemalt korralik auto, millega saaks linna vahel kummi sussitamas käia.
Küll on aga Inglismaal edukalt katsetatud meetodit, kus kõik inimesed liideti automaatselt vabatahtlike pensionimaksetega. Samas jäil iga-ühel vabadus teha avaldus ja pensionist loobuda. Kui enne, nö. opt-in süsteemiga, säästsid pensioniks 1/3, siis opt-out süsteemiga 2/3 vaatlusalustest. Usun, et kui valitsus ütleks, et 1. jaanuaril toimuva tulumaksu vähendamisega säästetav 1% palgast läheb automaatselt pensionisambasse, kuhu riik paneb 2% juurde, siis vaevuksid vähesed tõttama seda raha välja nõutama. Ja järgmisel aastal võiks siis lisada teise protsendi.

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Thursday, October 04, 2007

Optimal Immigration Policy

Bonnis paiknev Institute for the Study of Labor (IZA) avaldas hiljuti uurimuse, kus analüüsiti erinevaid immigratsioonipoliitikaid tööjõupuuduse likvideerimiseks.
Lühidalt on analüüsi järeldus, et kõige valutum on vastuvõtja riigile ajutise migratsiooni skeem, kus immigranti motiveeritakse kodumaale naasma läbi osa palga väljamaksmise koju tagasi jõudes ja samal ajal trahvides tööandjaid või tööjõu vahendajaid, kui töötaja jääb sihtriiki üle tähtaja.
Mõne aja taguses blogis pakkusin välja, et otsus, milliseid immigrante riiki lubada, võiks olla tehtud oksjoni korras. Arvan, et koos IZA välja pakutud lahendusega aitaks see paindlikult ja valutult vähendada tänaseid tööjõupuudusest tingitud probleeme majanduse arengus.

Ajutine immigratsiooni annaks ka valitsusele hoova majanduse tsüklilisuse vähendamiseks. Tänu viimase paari aasta arengule oleme täna olukorras, kus ehitusmahtude vähenemine tähendaks tuhandete inimeste töötuks jäämist. Kui valitsus oleks kasutanud ajutisi (nt. 6-kuulisi) töölubasid võiks majanduse aeglustumise korral lihtsalt hakata väljastatavate lubade arvu vähendama, mistõttu nõudluse vähenemisega sama-aegselt toimuks ka pakkumise vähenemine.

Tuesday, October 02, 2007

I so much agree to this post

I so much agree to this post. This is really why i'm happy i studied economics, but i've been unable to explain it well so far.

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