Understanding Labor Unions in Finland
The Finnish right are trying not just to make certain reforms but to break the Finnish labor model altogether.
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In Finland, unions have teeth. Usually, they do not need to bare them. However, during the nine months of right wing in the government in Finland, the Finnish unions been running regular strike actions to remind the government of this fact.
Thus far, the government has not budged. Its intent is not only setting heavy austerity measures, but also policies that would mean no longer negotiating with the trade union movement on legislation affecting labor matters, indeed, explicitly setting laws limiting the joint negotiation of wages, such as forbidding pay rises higher than those of the export sector industries.
Many prominent Finnish economists, and more moderate center-right politicians, have already sounded the alarm on the dangers of stability this struggle causes, especially considering the precarious situation in Europe regarding Russia. Nevertheless, the government’s intransigence implies it genuinely wishes to break the power of the labor movement for good, in accordance with the long-term wishes of the right wing and the business class.
The Nordic welfare state, including the Finnish welfare state, has received a lot of attention among the American left. However, what it means can be hazy, a byword for better services and more state intervention in economics. And these indeed serve as important pillars of the welfare state. However, the foundation the entire edifice stands on has always been a strong, comprehensive trade union movement.
But what are Finnish trade union actually like? Is the same concept repeatable elsewhere?
The Nordic system has been frequently called “Nordic corporatism,” a system of tripartite negotiations between unions, business associations and the government on wages and working conditions. Some might associate the term “corporatism” with other regimes, like Mussolini’s Italy.
The crucial difference is, of course, the independence of the labor market organizations. Mussolini’s intention for his “corporatism” was that all the corporate organs the fascists would establish would yield to the fascist state – whereas in Finland, particularly the political right has claimed that this model gives too much power to the other actors (chiefly the unions), a de facto power to set policy the state should be setting.
And, in a way, that is true: Nordic corporatism relies on the idea that not only the unions, but the similar organizations of private industries should be seen as independent actors which the state can bring together to negotiate. There is nothing to prevent the state from legislating, of course, but it should then be prepared to face the consequences. Merely the threat of those consequences has been enough for society to shape itself in ways designed to avoid it.
The level of labor organization in Finland has traditionally been extensive, and still is. According to the latest work-life barometers, 70% of employees belong to a union. Even many non-union workers defer to union members when it comes, for instance, to a factory being on strike.
Currently, there are 80 different trade unions in Finland. All of these belong to one of three large confederations – SAK (Central Organization of Finnish Trade Unions), STTK (The Finnish Confederation of Professionals) and Akava (Confederation of Unions for Professional and Managerial Staff in Finland).
SAK represents blue-collar workers and STTK and Akava white-collar workers, with Akava unions typically representing the more academically educated end. The borders between these sectors are nevertheless occasionally hazy, which can lead to friction between unions and confederations.
What do the unions focus on when they are not protesting? Chiefly on negotiating and then monitoring the implementation of the collective sectoral “työehtosopimus” agreements, commonly just known as “TES,” the collective sectoral agreements that govern most of Finnish working life. A key word here is sectoral; ideally, the TES should indeed cover the working conditions (wages, hours, holidays etc.) for an entire profession, to put all the workers on a broadly equal bottom line, independent of the company they are working for.
In its most stereotypical form, such conditions and pay levels are often basically set for all jobs in “kolmikanta” (tripod), vast yearly collective negotiations involving the government, all unions, and all employer associations. In practice, these negotiations either do not happen or break down and those things are settled sector by sector by relevant employee/employer unions, especially during right-wing governments. The left parties have always been more amenable to the kolmikanta.
While kolmikanta has been accused of being a stodgy, inflexible system, in practice it has managed to combine great social stability with steadily improving conditions for the covered workers. Once a TES has been accepted into a sector, for a certain period (like two years, or so on), unions are not supposed to go on strike regarding things covered in TES. Political strikes such as the ones conducted by unions now are still permitted.
What the system relies on is “yleissitovuus,” another very Finnish term, loosely translating to “general bindingness,” perhaps. Once a TES has been agreed on between the central organizations, and if it covers enough workplaces and has been confirmed by a special committee, it will also apply to those that have not signed it. In other words, it has the force of the law behind it, equivalent to all other employment-related legislation.
This, of course, bolsters the status of the unions, as there is less inclination for companies to attempt to hinder organizing at their workplace. And in any case, “yleissitovuus” cover 80% of all employment relationships in Finland, which has traditionally been one of the strongest reasons why Finland does not have a formal minimum wage – it is simply not needed.
For many workers, though, these are not the most important reasons for belonging to unions. Rather, it is “ansiosidonnainen” – the earnings-related benefits in case of unemployment, paid to those who belong an unemployment fund on top of a standard state-guaranteed unemployment benefit available for everyone.
Most commonly, such unemployment funds are run by unions and linked to union membership, though they may, for instance, join an independent unemployment insurance fund, like YTK, or “Loimaa fund,” deliberately boosted by the employers and right-wingers as an alternative to unions. Still even many of those joining this fund refer to it as a “Loimaa union,” an indication that there may be some confusion about the intentions behind all this.
Compared to American unions, then, the Finnish unions have a lot of power to affect everything except individual hiring decisions (though of course they can help the employees if they have been treated illegally, i.e., clearly racist discrimination etc.)
Likewise, one debate that is dead in Finland – and was historically mainly an import from America – is the difference between open shop and a closed shop. Finnish workers are quite free to not belong to a union, at any workplace, though there might well be soft pressure on many workplaces on them to join, and cultural factors mean that many join anyway.
Labor unions have, a long time ago, become a pillar of society. Not one to advocate for revolution, certainly (Finland has one workers’ revolution in its history, and it did not end well for the revolting workers) but one that advances the interests of the workers through negotiations, with the threat of a labor action in the event of a breakdown in negotiations being a backrest.
What is at stake with the current showdown, then, is not any case of wages being decreased, services cut or so on. It is whether this model can survive in the future – continue to show an example to the rest of the world on how a strong role of labor movement within a society can, in the end, be beneficial to all. When the Finnish government toys with breaking with all of it down, it invites chaos. Not just directly, but by chipping away at the bedrock of a system they still claim to love.
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