Prime Minister calls for tripartite cooperation

Finland’s Prime Minister Mari Kiviniemi has called for wage coordination and a framework for moderate collective agreements negotiated on a tripartite basis. She said that a tripartite programme, lasting over the next two electoral periods, is needed to improve the competitiveness of Finnish labour, and to promote growth and investment. Trade unions welcomed the proposal, saying that they, employers and ministers need to have ‘a common script’ for their objectives.

Prime Minister’s proposal

Mari Kiviniemi’s statement was an important call for social partners to discuss the Finnish pay structure. Ms Kiviniemi also stated that the erosion of consumer purchasing power that would result from moderate pay deals could be offset by not raising the taxation of labour. She said that the taxation of capital and larger dividends could be increased.

Trade unions welcome initiative

Trade unions have welcomed the initiative saying that trade unions, employer organisations and the government need to have a common script on what needs to be done.

Mikko Mäenpää, the President of the Finnish Confederation of Professionals (STTK), said the government’s views had come close to those of his organisation, and he welcomed the Prime Minister’s initiative, adding that it was important to begin negotiations without preconditions. He said the idea of wage moderation or tax breaks for corporations should not be seen as separate questions. Mr Mäenpää said: ‘Moderate goals cannot be achieved without long-term inspection. Consensus on what is desired must be defined first.’

Ms Kiviniemi’s proposal has long been supported by Lauri Ihalainen, the previous president of the Central Organisation of Finnish Trade Unions (SAK). He introduced the idea of a tripartite programme that would last two electoral terms of parliament. Mr Ihalainen stated that:

It will be a strongly restorative element if social partners could define a joint definition of policy concerning economic growth and employment that is longer than a single electoral period. A natural basis for this was made in the tripartite programme for securing employment and economic growth published by the Finnish government and labour market organisations in October 2010.

The tripartite report issued by the social partners introduces about 90 individual measures aimed at economic growth, job creation and a sustainable public sector (FI1010031I).

Mr Ihalainen emphasised that he is not demanding the return of the national centralised bargaining structure, but says that he is certainly wondering why the tripartite coordination of economic and labour market policy, that has been very favourable to the Finnish economy, has been running down just when tripartite cooperation is obviously needed.

EK rejects centralised tripartite bargaining structure

The Confederation of Finnish Industries (EK) opposes the proposal for a return of the centralised tripartite bargaining structure. EK announced the end of this in 2007, saying that bargaining at sectoral, company and even individual-level would be the negotiation models of the future. EK has for a long time argued that the policy of offering equal pay increases to every branch of the economy and employee group has come to an end. With the renouncement of the centralised bargaining model, trade union confederations will be compelled to intensify their cooperation (FI0806029I).

However, Eero Ojala, a director of EK, who has spent more than 30 years as a representative of employer organisations, believes that tripartite cooperation will continue in the Finnish labour market, although the negotiation of pay increases will tend to occur more at company level. Mr Ojala said a good use of tripartite cooperation would be a financial council led by the Prime Minister. Mr Ojala said: ‘A tripartite cooperation is still a good tool in the preparation of working-life issues.’ Mr Ojala added that there have been several notable tripartite working groups set up by the government in the past few years.

Pertti Jokivuori, University of Jyväskylä