1998 May-Jun

(28.06.1998 - Juhani Artto) A clear majority of members of unions affiliated to the Central Organisation of Finnish Trade Unions - SAK - are satisfied with their working hours. This is one of the main conclusions of a study conducted in Spring 1998. The study forms part of a "Gender and Flexibility" project in which SAK is involved together with the British TUC and Dutch FNV organisations.

The investigation shows that regular Monday to Friday day work is still the norm. 78 per cent of the respondents are in regular full-time employment and 6 per cent are in regular part-time work. The proportion of those in temporary jobs was 14 per cent, of whom just over 70 per cent were working full-time and the rest part-time. Other types of employment, including those who are called to work when needed, made up 2 per cent of the sample.

Three years ago the proportion of atypical jobs was 14 per cent. Now it is 22 per cent. There is a remarkable gender split. 31 per cent of working women are in atypical employment, while the figure is only 14 per cent for men. Moreover the proportion of atypical jobs for women is rising while for men it is falling.

Three out of four respondents refer to the nature of the work as the reason for their abnormal working hours. Other reasons given were the desire for additional income (16 per cent), leisure time by day (14 per cent), a higher hourly pay rate (12 per cent), having no other choice of work (7 per cent) and the suitability of such working hours for individual family circumstances.

* 80 per cent of men regard their present working hours as satisfactory in their individual situation, while women take the same view in 74 per cent of cases. Dissatisfaction with working hours is greatest in the private service sector.

* 37 per cent of respondents are satisfied with the length of their working hours. The corresponding proportion is 56 per cent in Britain and 67 per cent in the Netherlands. 31 per cent of SAK affiliated union members would like to work longer hours. In Britain and The Netherlands only 7 per cent express a similar attitude.

* 64 per cent of part-timers would prefer to have longer working hours, while only 28 per cent of full-timers express such a preference.

* 30 per cent of SAK affiliated union members would prefer shorter working hours. The corresponding proportion in the United Kingdom is higher than this, while in The Netherlands it is lower than in Finland.

In Great Britain and The Netherlands there are far fewer women than men seeking shorter working hours, which is explained by the high rate of female employment in part-time jobs. In Finland, the desire for shorter working hours is at practically the same level for both male and female SAK affiliated union members. The rate of part-time employment is much lower in Finland than in The Netherlands and Great Britain.

Why do so many Finns want to work more?

* 55 per cent of those who expressed this wish refer to higher earnings as the reason. Other reasons include liking the work (32 per cent overall and 38 per cent of women), seeking increased security in life (20 per cent) and the desire to acquire benefits enjoyed by full-timers (13 per cent overall and 22 per cent of women).

The reasons given for seeking a cut in working hours are varied: the need for more time to devote to family and hobbies (33 per cent), a desire to reduce the strain of work in the run-up to retiring age (28 per cent), health or stress (24 per cent), child care (12 per cent) and having a good enough income (12 per cent).

Cutting working hours without full compensation has slowly become a less attractive proposition to members of SAK affiliated unions. This attitude was first measured in 1984, when 35 per cent gave positive replies to the question, while only 25 per cent categorically rejected the idea.

In March 1998 only 18 per cent expressed a willingness to accept shorter working hours without full compensation, 43 per cent were strongly opposed to this and a further 25 per cent were rather negative towards the idea.

The research report points out that one possible reason why the idea has become less attractive is the fact that working hours have in fact steadily fallen, partly thanks to collective agreements and partly because of more part-time and temporary jobs.

The questionnaire was sent by post to two thousand members of SAK affiliated trade unions, of whom 51 per cent responded. SAK has 24 affiliated national unions with a total of 1.1 million members including industrial, transport and private service sector workers and most public sector employees.

No EU membership for Estonia without major changes in working life*

Helsinki (21.06.1998 - Irmeli Palmu) The Estonian trade union movement is generally in favour of Estonian membership of the EU. Estonia is one of the six countries which recently began membership negotiations. The others are Poland, Slovakia, the Czech Republic, Hungary and Cyprus.

Since 1995 Raivo Paavo, Chairman of the central trade union organisation EAKL, has been demanding a referendum on membership.

Estonia's trade union movement is struggling with many problems. Union membership is not popular, and only 10 - 20 per cent of employees have joined a union. Pay differentials are huge and it is more a rule than an exception for part of the wage or salary to be paid under the counter.

The minimum wage law guarantees a monthly income of 1,100 Estonian kroons (USD 1.0 = 14 kroons). Chairman Paavo estimates that the average monthly pay is 4,000 kroons (less than 300 US dollars). There is a flat 26 per cent income tax rate, but no social security system. The State pays monthly unemployment compensation of 300 kroons for the six first months of unemployment.

Although the State pays a small pension to older Estonians, there are no public health, accident or unemployment insurance systems. Five trade unions operate unemployment funds.

Preparations for a social security reform are underway. A proposal has been made for a social security tax, which would be shared between pensions and health care. The employees' contribution towards financing the tax would probably be 4 - 5 percentage points. "If we want to be partners in administering social security flows, then we have to define the contribution level of employees. Currently employees make no contribution at all to social security", Raivo Paavo says.

"Tripartite negotiations are unknown here and, according to European Commissioner Padraig Flynn, this is something unacceptable to the EU. The occupational safety norms are far from satisfying. There are plenty of problems seeking quick solutions", Paavo emphasises.

Ulle Schmidt, President of the Union of Health Sector Employees, has conducted studies on attitudes towards Estonian membership of the EU.

"People do not know much about the EU", she says.

"There are many fears surrounding the subject of the EU. People are afraid that rents will not be regulated in the future, as that is the situation in EU countries. A few people think that in EU countries smoking is forbidden in the street and that this prohibition will be applied in Estonia, too."

"Union leaders have a more realistic idea of the EU and mainly have a positive attitude towards Estonian membership."

"A few people believe that the EU is like the Soviet Union and wonder where the sense lies in moving from one international union to another."

Schmidt characterises popular attitudes: "People are tired, they worry about their lives and they are not interested in the importance of democracy. Some believe that all agreements will follow automatically and that there will be nothing more to do once Estonia is a member of the EU".

"Trade unions have given their members some training in EU matters. The most interested have been Russian-speaking metal workers in Tallinn, for whom the Finnish Metalworkers Union has organised courses."

"It is commonly believed in Estonia that EU membership will increase Estonian competitiveness due to better legislation and education. On the other hand, there are worries about the future of industry and the workforce, especially in agriculture."

"The trade union movement is weak and needs the assistance which many Estonians believe will be provided by the EU", Schmidt notes.

*Originally published in Puntari (8-98), the magazine of the Union of Commercial Employees in Finland

Hours of work investigator Raija Julkunen:
Working hours for men (fathers) more alarming than short working hours for women (mothers)*

Helsinki (15.06.1998) Hours of work have become gender-oriented in Europe. Women have shorter working hours than men and are more prepared to take advantage of parental and other long-term leaves of absence and job-sharing programmes.

How should we view this? Are part-time work and long leaves of absence a feminine way of enhancing the quality of life or are they a trap which marginalises women and cuts their earnings in the labour market?

The commentators take a strict view. In their opinion we should discontinue all options favouring part-time work and "career breaks" that undermine the work of women. This will leave a general reduction in working hours as a policy in line with the interests of women.

It is clear that a general reduction in working hours best corresponds to the needs of women and that political movements working on behalf of women have always sought a shorter working day for both women and men. However, we cannot put a stay on the needs of women while we wait for the universal implementation of a six-hour working day. I wouldn't want to stop our tentative efforts to share work while there are women who take advantage of the programmes. As long as women participate in job-sharing schemes voluntarily, such schemes are acceptable.

It is important to analyse how job-sharing and flexibility policies affect the role of women in the labour market and influence their quality of life. Job-sharing must be voluntary and temporary and any loss of income must be within the limits of acceptability.

The programmes should increase the rights of women to decide how they schedule working hours and leisure. Nevertheless, part-time work or temporary leave of absence are better alternatives from the point of view of the situation of women in the labour market than is withdrawal from the labour market for longer periods.

It is important for gender equality to promote the opportunities of men to take advantage of parental leave and to adapt their working hours to the needs of their families. According to recent studies made by a project at Stakes (the National Research and Development Centre for Welfare and Health), men and women have almost identical attitudes towards how to combine work with family life.

In spite of this, the gender routine - formulated in families, income creation and public life, at places of work and elsewhere - results in gender-oriented practices.

On the whole, we should be more alarmed by the longer working hours of men (fathers) than by the shorter working hours of women (mothers).

*Excerpt from a lecture given by Raija Julkunen at a seminar on working hours organised by SAK in Helsinki on May 11 1998.

Abilities of Female Employees Underused in Engineering Industries

Helsinki (07.06.1998 - Juhani Artto) According to a new study, women's wages and salaries in the engineering industries are only 82 per cent of those of men. This figure comes as no surprise to experts, since roughly similar differences have previously been recorded in several industries in Finland and in other economically developed countries.

The study was conducted by Juhana Vartiainen, a researcher at the Labour Institute for Economic Research (http://www.labour.fi/). The statistical material, which Vartiainen describes as being of high quality, covers the years from 1990 to 1995.

But what are the reasons for this pay differential?

The study reveals that about two thirds of the wage and salary difference is due to the fact that jobs typically done by women are less complex and are categorised as less demanding than those mainly done by men. The remaining third seems to result from unequal treatment of women and men.

This conclusion leads to another question. Are the abilities of female employees underused compared to those of men?

With information about the same employees over a longer period, Vartiainen had a real opportunity to provide a reliable answer to this question. This made it possible to measure how the mobility of women and men affects their respective productivity.

An analysis of the available material shows that as work becomes more demanding, the productivity of women clearly rises more than that of men. This means that women have a great deal of unused capacity and skills, while men work closer to the upper limits of their competence.

According to an Institute press release, the researcher's approach and results are a novelty in this field of research.

Economists speculate that the fear of discontinuous careers can be a reason for disfavouring women in working life. If women leave their jobs more often than men - for example to take parental leave - then training women for more demanding work is an uncertain investment for the employer.

However, this research result suggests a different conclusion. Encouraging and helping women to move into more demanding jobs could both increase their earnings and improve the overall productivity of industry.

"This would be a much more effective way of promoting equality between men and women than the special pay increases awarded to lower income employees in the recent comprehensive incomes policy agreements", the Labour Institute for Economic Research states in its press release.

Secretary of Equal Opportunity Riitta Partinen:
"Employees and employers both benefit from equality between men and women in working life"

Helsinki (31.05.1998 - Juhani Artto) The Nordic countries are often - and with justification - presented as model countries with respect to equality of the sexes. Concrete results in this area, however, are far from ideal in the opinion of Riitta Partinen, the SAK Secretary of Equal Opportunity. In Finland, as in all other countries in the world, women are still discriminated against in working life, even though in the Nordic countries this occurs in forms which are more covert than elsewhere.

"In earlier decades we believed that inequality would disappear when legislation was balanced, when women got as much formal education as men and when the problem of arranging day-care for small children was overcome. In the 1990s, however, we have had to recognise that all of this is not enough", Partinen says.

"We have been forced to deepen our analysis of the reasons why the many important steps which have been taken to create the conditions for equality have left us with so few concrete results in working life."

What is going wrong?

Partinen lists the obstacles: "The illusion of equality in Finland is one of them. We are accustomed to discrimination and it makes us blind to inequality. Generally speaking, enterprise management does not see the importance of equality, which reinforces passive attitudes and indifference. Some people refrain from actively promoting equality in the fear that they will be branded as troublemakers and isolated. The legislation and agreements are not well-known and, finally, there is lack of will."

In spite of this the attitude climate is, according to Partinen's experiences, more favourable for equality in Finland than elsewhere - Sweden, Norway and Denmark included. "Here the participation of women in working life is so self-evident that hardly anybody makes mothers feel guilty about working outside of the home. Rather many men share household responsibilities with their wives."

"During the economic slump of the early 1990s, some government officials and politicians were ready to send female employees back home or turn them into part-time workers. A large majority of women rejected these ideas and expressed their preference for full-time employment."

"Finnish women know from their own experience that economic independence is the best guarantee of security and healthy self-esteem."

But how is progress to be made?

"There is a promising new development in view", Partinen says. "Recently a new kind of interest towards the equality of the sexes has been aroused among employers. The key idea behind this late awakening is that there are benefits to be gained. There is growing evidence that equality in the workplace is a good thing not only in principle but also from the economic point of view."

"Equality in working life means a better working atmosphere, more satisfied employees and higher work motivation. Staff turnover falls and - as enterprise managers are gradually beginning to appreciate - the corporate image is enhanced both nationally and internationally."

"Partly these are still hypotheses because research and empirical data in this field are surprisingly scarce."

As an encouraging example of the positive approach, Partinen refers to the chemical industry multinational Akzo-Nobel's unit in Ireland. "After noticing that there were no women in the management, the five year pursuit of an active equality policy led the Irish unit staff to make such rapid progress that today there is no longer any need for further discussion of the issue."

In Finland the labour market partners have agreed on an experimental equality promotion project covering ten workplaces in various sectors of working life. The project will report on its progress in June 1999.

Partinen also has positive expectations of the work to integrate job evaluation into equality work. Only 300,000 jobs in Finnish working life have been evaluated according to how demanding they are for the worker. Many more jobs will be evaluated over the next few years, thereby improving the basis for combating discrimination against women.

Individual workplaces are now at the centre of equality policy. "We are trying to create examples of good practice from which others can learn", Partinen says. At top level round table discussions between the labour market partners, SAK has proposed the establishment of "good practice banks". Partinen hopes that one of these will be set up in Finland in autumn 1999. At this time Finland will preside at an EU equality summit. After this it will be possible to set up a European good practice bank.

"The trade union movement must launch constructive initiatives at grassroots level. The greatest challenge is to find initiatives leading to concrete solutions", Partinen emphasises.

Kimmo Kiljunen MP stresses the benefits of shorter working hours

(20.05.1998 - Kimmo Kiljunen) Productivity is rising steadily. Over the current century output per hour has increased 25-fold. We are achieving production targets more easily and rapidly than ever before. All of this is extending available leisure time.

This increased leisure time can be divided evenly, bringing benefits to each and every one of us, or it can be managed by forcing part of the labour force to discontinue working life. Ultimately this choice is a political one.

Historically, some of the productivity increase has been used to shorten hours of work. At the beginning of this century the average working year in Finland was about 3,000 hours. Now it is only 1,700 hours.

In Summer 1917 Finland became the first country in the world to approve legislation on the eight hour working day.

The last legislative reform of regular hours of work was enacted in 1965, when Finland adopted a five-day, 40-hour working week. Currently the average working week in Finland is 38 hours.In most cases reductions in working hours in western industrialised countries have been implemented at times of rapid economic growth. The preference has been for extended leisure time, instead of income growth, resulting in an enhanced quality of life.

Nowadays the demand for shorter working hours is a reaction to a crisis in working life. Cutting working hours is one way to solve the unemployment problem. It is not proper for some people to work to an extreme while others have no work at all.Without a deliberate policy on working hours, gainful employment tends to be unevenly distributed. Work sharing, like income distribution, is a question of political will.

Shortening working hours by means of legislation has become the subject of a heated debate. In France the socialist-led government has launched a reform to limit the working week to 35 hours by the start of the year 2000 without cutting wages and salaries. The Italian government has followed suit, while in Germany the trade unions have worked energetically for the same objective.

The European Trade Union Confederation ETUC has also issued a statement supporting a 32-hour working week.

In Finland, the largest central trade union organisation SAK concluded at its congress that reducing unemployment requires the redistribution of work. The goal is a 30-hour average working week.The employers' camp is fiercely opposed to these plans and demands. They are prepared to accept more flexible working hours but only through local collective bargaining, and not by changing legislation. The employers are not convinced that a general reduction in hours of work would reduce unemployment. In their opinion, the result could be the opposite if the reform were to undermine competitiveness.

On the other hand, nobody can claim that the unemployment rate is entirely independent of actual working hours. In the USA, Great Britain and the Netherlands, for example, unemployment rates are below average while the proportion of part-time work is exceptionally large. One third of the labour force in these three countries is in part-time work, while the corresponding proportion in Finland is only 8 per cent.When demanding shorter working hours it is wise to avoid becoming obsessed with only a single alternative, e.g. weekly working hours.

There is definitely also a need to reduce weekly working hours but attention should be paid to working hours over the entire life cycle. There are several alternatives: a 4-day working week, a 6-hour working day, extended annual leave, sabbatical and educational leave, parental leave and early retirement schemes. All of these are needed, as the individual case warrants.

The question is not only about improving employment statistics but also about welfare, family values and quality of life.

As long ago as the 1960s the Finnish professor Paavo Seppänen proposed a 2 x 6 working hour model. Per employee the daily working hours would be cut but the operating times of factories and opening hours of service facilities would be extended. The productivity of work and the utilisation rate of machines, equipment and working space would rise. Both economic and social well-being would improve.

Seppänen's model did not seek to solve an unemployment problem but to adapt working hours and leisure optimally to the needs of modern society.

It may be a coincidence that arithmetically Seppänen's model would solve Finland's present huge level of unemployment. If the extra leisure of the unemployed were to be shared evenly between those in work, then it would come to 400 hours a year for each and every worker gainfully employed. This equals the 30-hour working week and 6-hour working day.

According to opinion polls, three out of four Finnish employees would agree to reduced working hours without full income compensation if this provided work to the unemployed. The same proportion of entrepreneurs are ready to support shorter working hours for their employees - naturally with a reduced pay-cheque.

SAK president Lauri Ihalainen has proposed a national solidarity agreement which would include a sectoral reduction in working hours without full income compensation. The State could ameliorate the agreement with tax cuts so that net income would not decrease significantly. A condition of the agreement would be a commitment by the employers to hire unemployed workers.

What is it that makes it so difficult to implement these proposals? Why have there not been more purposeful efforts to reduce working hours?

Each and every one of us could benefit. The marginalisation of the unemployed could be prevented. Stress and exhaustion among those in work could be alleviated. Macro-economic purchasing power would improve and the public sector economy would be stimulated.

Unemployment is a manifestation of individual tragedy and macroeconomic wastage which we cannot afford.

kimmo.kiljunen@eduskunta.mailnet.fi

A clear majority of Finns appreciate the union movement

Helsinki (07.05.1998 - Juhani Artto) Finnish people are favourably disposed towards the trade union movement. Of the three central trade union confederations, the largest - SAK - is held in highest esteem with almost two-thirds of the population (64 per cent) saying that they appreciate this organisation "rather a lot" or better.

The two other central trade union confederations, STTK and Akava, also earn a high score with positive responses of 58 and 54 per cent respectively.

These results are from a recent opinion poll conducted for SAK by Gallup Finland. 1008 Finnish people over 15 years of age and living in various parts of the country were interviewed.

Contrary to the commonly held view, those under 35 years of age had the strongest faith in trade unions when asked which organisation or institution is the most effective force in combating unemployment. Union movement was the first choice of 53 per cent of everyone interviewed. Lower-paid salaried employees also clearly had a higher than average belief in the ability of the union movement to fight unemployment.

The efforts made by the government of social democratic Prime Minister Paavo Lipponen to cut unemployment were appreciated by 41 per cent of those interviewed. This figure was slightly higher than the support given to President Martti Ahtisaari on the same issue. The employers scored 34 per cent and the political opposition led by the Center Party 33 per cent.

Three out of four Finns (76 %) think that contracting out of public services has gone too far if it results in lower pay or weakened job security. More than half of those interviewed (54 per cent) are unable to see sufficiently compelling economic justifications for contracting out public services.

A majority in all social strata are opposed to competition at the expense of wage levels and job security. This is even the view of most organised small and medium-scale entrepreneurs.

The study confirmed that an overwhelming majority of the Finns (81 per cent) support the system of collective agreements in which the parties agree on minimum conditions of service. There are significant doubts concerning local collective bargaining, with 69 per cent believing that the employees are in a disadvantaged position when there are only local negotiations and agreements.

Three out of four Finns are opposed to tax cuts where these mean cuts in social security and public services. Almost as many (73 per cent) are in favour of raising capital, property and ecological taxes in order to enable cuts in income tax.

Only a quarter of those interviewed opposed the idea of shortening working hours at the cost of reduced incomes if the aim is to combat serious unemployment.

Union structure: the trend is to merge slowly

Helsinki (05.05.1998 - Juhani Artto) In Finland, as in several other industrialised countries, mergers are taking place in the union movement.

Four private service sector unions in Finland's largest central trade union organisation, SAK, have begun negotiations which will probably lead to their merger in 2001. The four unions currently represent some 212,000 commercial workers, employees in the hotel and catering industry, building caretakers, cleaners, industrial guards, travel agency employees and workers in a large number of smaller sectors. Almost two thirds of these belong to the Union of Commercial Employees.

One of the central issues in the merger talks is that of how such a large spectrum of people in different occupations can be put together harmoniously into a single union. Activists in the USA have lots of experience of multi-sector trade unions but the Finns are less accustomed to this. Union structure in Finland is traditionally based on the "one industry, one union" -principle.

However, recent history is encouraging. The Union of Commercial Employees itself is the result of a successful merger of three rival unions eleven years ago.

The present 35,000-member Chemical Workers Union also now represents the rubber, leather, glass and porcelain workers, who only a few years ago had two independent unions of their own. Such mergers can be effected smoothly through careful preparation which is fair to all parties and respects them.

Likewise, the 53,000-member Wood and Allied Workers Union was formed a couple of years ago by merging the unions of woodworkers and forest workers.

As the largest member union of SAK and the largest in Finland KTV, the 230,000-strong Municipal Workers Union, is proof that a multi-sector union can also successfully defend its members' rights in Finland. KTV members work in almost 2,000 different occupations.

Jari Vettenranta, who is in charge of KTV's strategic planning, emphasised in a recent interview* that the multi-trade structure of a union is quite well adapted to current changes in working life.

"When there are many unions developing the same service chain, they tend to pursue their own special interests, which makes it difficult to improve job descriptions. One large union is better able to harmonise different occupational groups through the process of such change", Vettenranta argues.

"Working on a large scale means that a union has more resources. This is necessary since future unions will have to work not only at the local and national level but also at European level. Our capacity to make an impact on politicians will depend more than ever on our own expertise. Unions will have to conduct their own research work."

"During the crisis in the Finnish economy in the early 1990s we were able to defend jobs in the municipalities, even though there were half a million unemployed in the country. Had KTV been a small union, this would not have been possible," Vettenranta claims.

In STTK, the second largest central trade union organisation, there is a merger underway involving the 73,000-member Union of Technical Employees, TL, the 51,000-member Union of Salaried Employees in Industry, STL, and the 8,000 member Federation of Construction Engineers in the Private Sector, RAL. This merger is due to be completed in three and a half years.

TL and STL have already concluded common collective agreements in several industries. The road towards full merger is, however, not completely free of hazards. Doubts and tension have arisen, for example, due to the fact that TL has a large majority of men (77 per cent) and STL has a still greater female majority (90 per cent).

In the long run the number of central trade union organisations may also be reduced from the present three. SAK president Lauri Ihalainen has recently spoken openly about the long term prospect of a merger between SAK and STTK.

STTK membership roughly doubled in a short period in the early 1990s following the bankruptcy of what was then the number two central trade union organisation, TVK. This collapse was due to the highly speculative manner in which a few of TVK's top leaders managed the organisation's financial resources.

Generally speaking, however, the Finnish unions have a sound and solid financial base thanks to a high rate of union membership and effective collection of union dues. Some 30 years ago the parties agreed that the employers would set off union dues directly from the earnings of their organised employees and remit the money directly to the union.

The rate of union membership in Finland is among the highest in the world, presently standing at about 90 per cent. Contrary to the fears of union activists, the membership rate even rose during the economic recession of the early 1990s.

It is safe to predict that further mergers are yet to come. There are still several small and very small unions among the 82 national unions within the three central trade union organisations. The dissolving of traditional ideological barriers is one factor working in favour of those who dream of having a strong union to defend employees in all sectors of working life.

Another safe prediction is that employee organisations representing employees with higher education and earnings levels will be the last to consider a full merger with the rest of the union movement. Such unions are well-represented in the third central trade union organisation, Akava.

*Jari Vettenranta was interviewed by Marja Ikkala, Editor-in-Chief of Ravintolahenkilökuntalehti, the magazine of the Hotel and Restaurant Workers Union.

Basis of Nordic trade unionism threatened, warns Finnish labour researcher Kimmo Kevätsalo

Helsinki (04.05.1998 - Kimmo Kevätsalo) We have constructed our union activism in the Nordic countries on the basis of a labour sales monopoly. The unions have sought to gather all employees working in an industry into a common cartel in which an agreement is made on a minimum wage and then nobody works for wages below the minimum.

If somebody, an unemployed worker for example, tries to break the cartel, then the organised workers take action to resist this. Employers are aware of this and usually honour the conditions of the cartel, i.e. the minimum conditions set out in the collective agreement.

It is a condition of the viability of such a cartel that the employers and workforce remain within the area covered by the agreement. Normally this area is defined by international borders.

This traditional basis is now seriously threatened. The character of the export industry, the workers of which are understood as the élite force of the trade union movement, has changed from national to global. This trend has been especially rapid since the mid-1980s.

The major features of this globalisation are the effort to concentrate on so-called core business in order to be globally competitive, and the desire to situate production near to markets and preferably in low-wage economies. The textile, garment and leather industries have long engaged in production in low-wage countries, but other industries are now following suit as the Central and Eastern European labour and consumer markets open up. News stories appear every day about Finnish companies launching operations in Poland, Slovakia, Hungary, Estonia or Russia.

According to a new report by Jyrki Ali-Yrkkö and Pekka Ylä-Anttila, fifteen years ago 22 major industrial companies in Finland employed a total of 214,000 workers. Only 29,000, or 14 per cent of these worked abroad. Although the total number of staff of these companies in 1995 was 50,000 employees greater, the proportion of those working in Finland had altered dramatically. The number of employees in Finland had fallen by 50,000 and the number of those working abroad had increased by 93,000. This means that in 1995 almost half of the staff of these 22 companies worked outside of Finland.

Understood globally, these 22 major industrial corporations were successfully meeting their obligation to create employment, but from the point of view of the labour force in Finland the results are not as comforting.

The 22 companies are the leading engineering, forest, chemical and foodstuffs industry enterprises in the Finnish export sector. They play a decisive role in the employer and sectoral associations of their own industries. Almost half of their employees work in countries which are beyond the reach of the labour sales cartel created by the Finnish trade union movement.

The unions representing the labour force of the 22 companies have traditionally been the backbone of private sector collective agreement negotiations in Finland. Now, however, one has to ask what kind of support there can be from a backbone from which half of the vertebrae have been removed.

In the new situation the trade union movement may choose between three main alternatives or various combinations of them.

The movement can try to create an international labour sales cartel on the European or global level. However, anyone who has studied international co-operation can bear witness to how expensive and time-consuming such efforts are, even when confined to the EU, let alone the rest of Europe and other continents.

The movement may also try to form company-based international cartels. This kind of model has recently been proposed by Jarmo Lähteenmäki, chairman of the Finnish Paperworkers Union. Such a strategy will have some prospects of success in the paper industry if the companies can agree on the model to be adopted. The rate of union membership in the main producer countries is high and production is centralised, making the companies susceptible to influence from a worker cartel.

Even in the paper industry, however, production is spreading rapidly to countries where the trade union movement does not exist or at least is not listened to.

Co-operation between the trade union movement and employers offers a third alternative. This would pursue an efficiency strategy which would defend Finnish high-wage jobs against global product and labour market competition. The central element of such a strategy would be to increase radically the skills, commitment and entrepreneurialism of employees.

This would require employers to change their present wasteful use of labour, while the trade union movement would have to accept the changes.

Most of the representatives of both parties continue nowadays to adhere to old ways of using labour. One consequence of this is that more jobs will be moved away from Finland.

Published originally in SAK's magazine Palkkatyöläinen 20-97 (10.11.1997). Kevätsalo works as labour researcher at the Metalworkers’ Union.