Trade Union News from Finland

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The news service is sponsored by SAK, the largest central trade union in Finland, and ten of its 23 affiliated unions.

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New book: Everything at stake
- safeguarding interests in a world without frontiers

Six per cent of SAK rank and file
have experience of moonlighting

Helsinki (21.09.2001 - Juhani Artto) One of the outcomes of a recent SAK survey was that six per cent of SAK rank and file union members have been involved in moonlighting. For an organisation representing more than a million workers this means about 60,000 people. However there was no public outcry in Finland when this figure came to light.

Everybody in Finland knows that working life is not free of shadowy arrangements whereby employer and workers evade taxes, social security contributions and other work-related expenses. Control mechanisms, however, are so strict that only a small part of this grey economy is in any way systematic.

Typically the grey economy arises in individual services where the buyer of the service is happy to enjoy it at a discount price. This kind of tax and social security evasion is closely associated with Finland’s high level of taxation and mandatory social security contributions. This factor even tempts citizens who generally take a dim view of the grey economy to occasionally have recourse to it, either in the role of client or vendor.

According to the SAK survey, only one seventh of the SAK rank and file are favourably disposed to moonlighting as such. A further sign of high moral standards typical of Finnish working life is the proportion of those who have been offered grey work. Out of the million plus rank and file union members, about 100,000 have been in this position. In most cases it may have been small entrepreneurs who made the offer. Their motivation may partly be a matter of sheer profiteering or of escaping from a dire financial situation.

Immigrant workers, who are commonly more dependent on their employers than other workers, are often more likely to be offered work under the counter. A typical situation arises on fruit farms. During the short berry-picking season there is a sharp rise in the demand for labour, but few Finns are attracted by the low pay and heavy work involved. For many Russians and Estonians, on the other hand, berry picking in Finland is a more attractive proposition, as the pay often exceeds alternative income sources at home. The berry farmers see this as an opportunity to increase profits by cutting labour costs.

Although a few newspapers this summer speculated on the subject of the grey economy in berry picking, no serious efforts were made to expose the true facts of the situation. This may change in future, as the SAK survey shows that a large majority of its rank and file are concerned about potential pressure to cut wages created by illegal foreign labour.

Earlier this year the Construction Workers Union magazine Rakentaja sent a reporter on surprise visits to small construction sites. The subsequent story in the magazine exposed several examples of illegal employment in which the entrepreneurs were clearly responsible their more-or-less willing victims were mainly migrant workers from Estonia.

Easier international travel and the increasing volume of immigrant labour in Finland means that the problem of the grey economy is becoming a steadily growing challenge for the Finnish trade union movement. In its June Congress SAK focused on this problem more clearly than ever. The goal is to integrate migrant workers into the unions so that these foreigners are not left to the mercies of unscrupulous fly-by-night employers. For the union movement this is the safest way to ensure implementation of the minimum standards set out in collective agreements.

The union for the hotel and catering sector (which merged last November with the commercial workers' and two smaller unions to form Service Unions United – PAM) has fought for several years against the grey economy centring on small pubs and cafeterias.

The Finnish working life and business community is, on the whole, one of the world’s most law-abiding. The latest report by Transparency International - the leading global anti-corruption watchdog - ranked Finland as number one: the world’s least corrupt economy.

The authorities estimate that the grey economy in Finland is worth some FIM 30 billion (EUR 5 billion) annually. This is FIM 10 billion (EUR 1.7 billion) more than the estimate of a few years ago. Compared with Finland’s GNP of about FIM 800 billion (EUR 133 billion) in 2001, the grey economy remains very small by international standards.

Daryl Taylor* adds:

15 years ago the language teachers’ section of the Finnish Union of Technical and Special Trades noted the special vulnerability of migrant workers to irregular employment arrangements. As leader of this section from 1988 to 1995 and thereafter I consistently argued that the most natural way to tackle this issue is through grassroots trade union work: defending the interests of the weaker party through organisation and networking. There is no weaker party than a newly-arrived or transient migrant worker, and so the first step in improving conditions generally must be to recruit migrant workers into union membership and to build solidarity between them and the trade union movement. In the late 1980s we showed that effective networking of even a few well-informed foreign workers rapidly improves the entire migrant labour market. It gives us cause for some satisfaction that the wisdom and benefits of our inclusive approach to this issue have now been recognised at the highest level of the union movement in Finland.

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