Only far left wants minimum wage in Finland

”We believe we need legislation. There are universally applicable collective agreements, but there should be a minimum wage for all trades which lack the power to negotiate or for those which are not covered by any agreement at all,” says the party leader Paavo Arhinmäki. 

Until the spring of 2014 he was Minister for Culture in the current government, but left in protest against proposed spending cuts and tax rises.

It is too early to say whether the message hits home during electioneering, since VF is only polling at around 10 percent. The party is also split with a faction which wants to keep the current model of trade specific collective agreements. Minimum wages are now decided through negotiations with employers. These minimum wages could be considered to be statutory, as the agreements are legally binding.

The Finnish Green Party (the Greens of Finland), on the other hand, want a basic level of income in order to make the benefit system simpler and more predictable for the poorest in society. The aim is to get the next government to agree to a trial of a basic income level.

A strong system

Matti Tukiainen, Director of Employment and Sustainable Growth at The Central Organisation of Finnish Trade Unions FFC, sees no reason to change Finnish legislation and introduce a minimum wage. He believes collective agreements work better than statutory minimum wages when it comes to setting wages. 

“Our collective agreement system is strong and in most cases universally applicable regardless of whether the employer is organised,” he says.

VF has been impressed by German sister party Die Linke, which managed to get their demand for a minimum wage through parliament. In Germany a growing number of low-paid jobs, especially part time jobs, means the wage gap is widening. Finnish wage differences are still small in a European perspective, according to fresh research from Mari Kangasniemi and Pekka Sauramo at the Finnish Labour Institute for Economic Research in Helsinki. 

In general countries with coordinated wage agreements had small differences in wages.

No threat

Matti Tukiainen cannot see anything which could change the belief in Finland’s collective agreement system in the near future. There are certainly companies which hire out labour in Finland too, but this represents a relatively small number of workers. 

“And in any case it is the host company’s collective agreements which counts. In recent years we have seen the emergence of zero hour contracts, where hours are determined by the employer’s need — for instance 0-40 hours a week. Temporary contracts are becoming more common too, as well as the trend of changing a job contract into a subcontractor contract. 

“There is also forced labour in Finland, where workers are allowed to carry on working, but only as long as they do it as independent contractors. This is a threat to the system.”