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Labour market and gender: tough challenges for Finland’s new government

Labour market and gender: tough challenges for Finland’s new government

| Text: Carl-Gustav Lindén, photo: Sakari Piippo

Negotiations to form a new government in Finland are over and the new government ministers in the three party coalition are ready to start the job of lifting the country out of the economic crisis. For the past ten years there has been plenty of political activity but the results have not materialised. Labour market reform is one of the most difficult issues.

Just a few years ago Finland was top of the class in the Eurozone. Suddenly the country is rock bottom together with Cyprus when it comes to economic growth. This is not a political dream scenario for the conservative parties the Center Party and the National Coalition Party and the populist the Finns Party. 

But Prime Minister Juha Sipilä is used to landing big, complex projects. As a business leader in the IT sector he established a reputation as an extremely efficient and focussed performer. His business career also made him a multi-millionaire and the richest prime minister in Finland’s history so far.

Sipilä has a corporate leader’s attitude to cooperation; everyone should be pulling in the same direction and there is no space for solo missions. In order to establish a joint vision the government will spend the first month working in an open office. 

Keeping them in check

This is a problem particularly for the less than coherent populist party who’s party leader Timo Soini has his work cut out just keeping his members in check. One of his new ministers, Jari Lindström, who is Minister of Justice and Employment, has already launched a solo initiative promising to bring back the obligation for companies to contribute to the state pension system. Lindström, who was an unemployed machine supervisor in the paper industry, explained that he had not realised how important the word of a government minister was.

He has also been confronted with the fact that he personally wants to bring back capital punishment in Finland; private thoughts a minister of justice should keep private.

Timo Soini himself will now have to balance the two contradictory roles as Finland’s Foreign Minister, who negotiates in accordance with the nation’s interest, and as a merciless EU critic. That paradox has been noted abroad too. Sir Graham Watson, head of The Alliance of Liberals and Democrats for Europe (ALDE), compares the appointment to putting count Dracula in charge of a blood bank. Even the French satirical magazine Charlie Hebdo has mentioned Soini and the populists’ rise under the headline ”Helsinki moves away from Europe”.


Sipilä’s business-like approach is evident in other ways too. During this spring’s government negotiations a new word entered the Finnish vocabulary; iteration. Juha Sipilä, a trained engineer, borrowed the term from the world of computer programmers in order to explain how the government talks would carry on until they arrived at the desired goal. It is known as being “in the loop”, a loop of activity, feedback and decisions.

The government platform which was arrived at through this loop is dominated by cuts to public services. The costs of nurseries, elementary schools, higher education and research are being cut, along with the overseas aid budget.

The country’s means-tested unemployment benefit will also be lowered, while defence spending goes up. It could look like Finland’s new government over the coming four years will move billions of euro from nurseries, education and welfare to the armed forces in order to gunboats and fighter jets.

“I have nothing against strengthening the armed forces in turbulent times, but I don’t like the government’s way of taking money from families, pensioners and people who are less well off,” says Jan Sundberg, a professor in political science at the Helsinki University.

He wonders what effect this will have on social cohesion, but takes a ‘wait and see’ approach to what effect the government’s policies will have in the coming four years. Except for one issue. Further restrictions to Finland’s already minimal immigration numbers is seen by the Finns Party sees one of the absolutely most important issues. 

“The risk is less immigration and that is not good for Finnish society,” says Sundberg.

“We should have open immigration, lower the demands for learning Finnish and open our western borders.”


Labour market reform is one of the most difficult issues. Finland is an extremely corporatist country where the power balance between trade unions, employers and government is cemented in blocks looking after their own interests. As a result, political reforms have remained more or less stagnant for more than ten years.

The Sipilä government is now talking about two different projects. One is a so-called social contract between the social partners in late summer. It is still not clear what this will entail but the aim is to reduce labour costs. Several central industry leaders have already said they will take a five percent pay cut. The other project is a continuation of the employment and growth agreement which has already been reached, with a central wage agreement for the next three years.

The government added plans to lower the means-tested unemployment benefit by 200 million euro next year, which had trade unions fuming. Sipilä quickly delayed that decision in order to keep the peace.

The government platform also includes measures aimed at easing employment protection and the rules for fixed term contracts which legal expert say are unsustainable. While working hours are being extended there is no reference to a better working life. 

The noise of the past few weeks also highlights the fact that none of the new government members have experience from negotiating major social agreements. There is therefore a risk that the interest blocks will remain as entrenched as ever in four years time when this parliamentary term is over.

Weaker women’s rights

The Nordic Labour Journal has previously written about how the new government’s core values are based on family, faith and country, with an openly male and conservative profile. Women’s position in society is clearly weaker after the election. Recently a group of 85 Finnish university heads and researchers signed an open letter to Sipilä’s government, criticising the government platform’s total lack of gender equality measures.

“Women and female dominated trades pay an unreasonably large proportion of the economic and human cost for the government’s new measures,” they felt.


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