The Finnish Bargaining System: Actors' Perceptions

Abstract

The paper presents results from a survey addressing views on the wage bargaining system among Finnish employees and employers. The survey is unique in the sense that the same questionnaire was sent to a representative sample of both employee representatives and employers in the private sector in Finland, as well as, in a slightly modified form, to the leadership of the federations and confederations of employers and employees. While the survey reveals a fairly high degree of overall satisfaction with the present form of collective bargaining in Finland, it also clearly indicates that there are issues where the views of the two sides of the labour market push in different directions. The divergent views concern, in particular, the trade-off between wage flexibility and income safety. While the employers would like to see greater freedom in wage setting, the employees, particularly workers, emphasise the role of the safety net provided by the minimum tariff wages stipulated by the collective agreements for each job and skill level. In the employers' views, such contractual wage floors inhibit the creation of low-wage jobs, while the employees resist such a view. While employers clearly opt for a more decentralised form of wage bargaining than is currently the case in Finland, it appears from the survey that both employers and employees firmly resist a thoroughly atomistic system of bargaining where the decision on the peace clause would also be transferred to the firm level. In this sense, a collective bargaining system is firmly embedded in the Finnish labour market.

This is part of the research project ”Rules of the game in the labour market: Industrial relations, the bargaining system and income policies in the 2000s”, financed by the Finnish Work Environment Fund, and carried out jointly by ETLA (The Research Institute if the Finnish Economy) and the Labour Institute for Economic Research. The authors thank Anni Heikkilä and Kenneth Snellman for comments and suggestions, and Sinikka Littu for drafting the figures.