Social convergence of the Baltic states within the enlarged EU: Is limited social dialogue an impediment?

Abstract

After regaining independence, social dialogue has not been of key importance in the functioning of Baltic labour markets. Despite trade unions’ being the dominant form of workers’ representation in the Baltic States, their role is limited owing to low union density and collective agreement coverage. Unions have, to a certain extent, been unable to overcome the Soviet legacy, although it has been argued that the unions have some unused potential. The effect of unions on labour market flexibility and inequalities is currently limited, thus explaining the balance between flexibility and security being more towards the former, and the favourable inequality dynamics in Estonia during the past 15 years is due to reasons other than the successful activities of unions and social dialogue. The chapter still discusses some moderate recent positive tendencies and effects, such as the dynamics of minimum wages in Estonia in recent years, the unions’ support of wage-bidding power of workers in the lowest wage categories, and positive effects in reducing the gender pay gap in Estonia, which has the largest labour market inequality in the Baltics.