Roundup: Fast agreement on reducing labor costs unlikely reached in Finland

A fast schedule to reach agreement on lowering the production costs in Finland looked less likely late Monday, as influential Finnish trade unions demanded talks about a five-percent cut in the production costs should be postponed for a year.

The newly installed center-right government had insisted that employees and employers should commit themselves to such a deal by the end of August. The Central Organization of blue collar workers, SAK, demanded on Monday that talks should begin in the autumn of 2016, but expert level preparations could begin now.

While no explicit response was given by the government to the demand of delay, Prime Minister Juha Sipila agreed earlier on Monday that a parallel plan to cut back unemployment benefits would be delayed until 2017.

Sipila admitted that the previous plan aiming at 2016 had been "unrealistic."

The SAK indicated on Monday it could agree to lower the threshold of work payment in return of more employer concessions.

The wording refers to the problem that unemployment benefits often give a better livelihood in Finland today than a salary from a new job. In Finland, an unemployed person can get benefits equal to 500 working days based on the level of earnings of the lost job.

The chairman of the SAK Lauri Lyly said that the delay in the unemployment benefits issue will ease the talks about immediate tariffs this week. The Finnish collective bargaining system is based on tripartite talks between the unions, the employers and the government.

Finland is currently entering the third year of a collective wage agreement and tariffs should be finalized by June 15. Several unions had threatened to step out of the talks in the wake of high key public exchanges in recent days.

The SAK represents over a million wage earners in Finland.

Akava, a central organization representing 600,000 highly trained professionals, also demanded a delay in the talks about lower production costs.

When publishing its program on May 27, 2015, the government threatened with major additional spending cuts affecting social benefits if what it had labelled as "societal agreement" on a five percent cut in costs was not reached.

Political analyst of the leading Finnish newspaper Helsingin Sanomat Unto Hamalainen noted recently that not a single cabinet member in the new government has experience in reaching major labour market agreements.

"The discrepancy between the abilities of the cabinet ministers and their major goals is huge," Hamalainen wrote.

He noted that such talks are a zero-sum game. "You cannot give the wage earners stick only but must offer some carrots as well", he said. Endit