For decades they have reached
comprehensive income policy agreements negotiated by the large, central
trade unions and the Confederation of Finnish Industries in cooperation
with state representatives. The model is similar to the one previously
found but long since abandoned in other Nordic countries.
In 2007 the employers were reluctant to carry on the tradition and
since then there has been a debate about what new rules should apply
for the labour market.
The parties cannot agree. The Confederation of Finnish Industries,
EK, has offered the trade unions a solution which would see the export
industry negotiate a moderate wage agreement with their trade union
counterparts. Then the three main trade union confederations, the
Central Organisation of Finnish Trade Unions (FFC), The Finnish
Confederation of Professionals (FTFC) and the Confederation of Unions
for Professional and Managerial Staff in Finland (Akava) would
recommend their members to stay within that agreement’s framework. In
the spring of 2012, when all trade unions have entered into agreements,
the government will come in and support employees by lowering income
tax.
Sate support
Prime Minister Jyrki Katainen (the National Coalition Party) and
Minister of Finance Jutta Urpilainen (the Social Democratic Party) have
agreed to support a moderate wage agreement with tax cuts for both
employees and employers. The latest wage negotiations have resulted in
wages for public sector workers which are higher than those in the
private sector. At the same time the number of illegal strike actions
has increased, particularly within strategic sectors like logistics –
i.e. transport and docks.
Finnish business has adopted this model from Sweden. The trade union
confederations have reacted negatively to put it mildly. They suspect
employers are not only aiming for the smallest possible wage increases
but that they also want to challenge the close relationship between the
Social Democratic Party and the FFC. The unions also have a range of
working life issues apart from wages which they want to find solutions
to through central negotiations.
Saved Finland
The history of three-party cooperation stretches back to 1968 when
the first comprehensive agreement was reached, yet the ground for it
all was prepared as early as in the 1950s.
Union representatives as well as the Social Democratic Party (SDP)
and the Left Alliance now want to point out that these agreements saved
Finland from the economic crisis of the early 1990s. In light of the
dark clouds on the horizon, employers should be interested in better
cooperation this time too. But their arguments don’t bite, despite the
attempts by the Prime Minister to market something he calls an
employment pact.
The pressure on employers, to whom the Prime Minister does listen,
is also increasing because the Minister of Labour Lauri Ihalainen
(SDP) is a former leader of the FFC.
The negotiations between the Federation of Finnish Technology
Industries, which represents export businesses l ike Nokia, and the
Finnish Metalworkers’ Union are ongoing. The Metalworkers’ Union wants
a pay increase of around four percent, which in light of current
problems could be seen as optimistic. Meanwhile workshops have plenty
of orders on their books and employment is good, which is reflected in
growing use of overtime.
Remote possibility
The current collective agreement runs out at the end of September.
Everyone is waiting for the results of the current negotiations. If
they fail it is quite possible that the Confederation of Finnish
Industries will be forced to back down and take their seat at the
negotiating table with the state and the trade union
confederations.
Right now this feels like a remote possibility in light of the
employers’ tough resistance.
Government ministers have already shown the negotiators the way by
taking 5 percent pay cuts themselves. This symbolic gesture hardly
impressed union negotiators who for the first time since the beginning
of the 2000s are forced to fight while faced with the fact that real
wages have started falling in Finland. They had been the fastest rising
real wages in the whole of the OECD region during the last decade,
along with those in Norway and Cyprus.
