Finnish union leaders warn of doubtful side of
"German labour market
Helsinki (18.09.2012 - Juhani Artto) A report published in early August by
the Federation of the Finnish Technology Industry indicates that Finland's
cost competitiveness has declined in comparison with its main competitors.
In the debate surrounding this issue employer representatives have
to the strength of the German export industry, in particular, and hinted
Finland should follow Germany's example.
"Germany's road cannot be our road", say the Presidents of two influential
unions, namely, the metalworkers' Riku Aalto and private sector salaried
Antti Rinne (trade union Pro). They came to this clear conclusion in late
August when the two unions published their 30-page study on how Germany's
labour market model has treated wage and salary earners since the middle of
1990s. At a later date the study, written by Kari Kinnunen, will also be
"Employers have totally ignored the employee perspective when referring
to Germany's example", Aalto and Rinne claim critically. They stress
it is essential for employees to be paid enough so as to allow them make a
decent living. This
is not the case in present day Germany. As a result of labour market and
social security reforms there are now millions who may be classed as ‘the
working poor’ in Germany.
In 2010 – not including the peculiar bottom layer, the so called
"mini-jobbers" - almost two million employees earned less than EUR 5 per
hour and eight million below EUR 8.50 per hour. The number of employees in
part-time jobs, in temporary employment relations and those who belong to
agency labour has
increased from 6 million to 9 million. And in addition to all this, in 2010
7 million work in "mini-jobs" where the monthly pay does not exceed EUR 400!
Meanwhile, in conjunction with this rapid rise in atypical employment
collective agreements have provided only low or at best very moderate pay
Since 2000 the real income of Germany's wage and salary earners has
decreased on average by 7 per cent, the German economic research institute
In real terms it can be said that Germany has acquired its strong cost
competitiveness by means of
applying or adopting the notorious “ race to the bottom" approach. Aalto and
Rinne characterize the means used in Germany as "doubtful".
This is interesting also in light of the current economic crisis in Europe
euro crisis. Germany's strong competitiveness has been bad, for example, for
EU's Mediterranean Member States, now struggling with more or less enormous
economic difficulties. Their companies have been finding it
difficult to defend their
positions in competition with German companies. Thus, Germany's "race to
the bottom" strategy has become an essentially negative and aggravating
factor, which serves to worsen Europe's
If Finland and other EU countries that are not currently suffering an economic
were to follow Germany's example, this would constitute a fatal blow to the
welfare society model or the ideal of social Europe. The Finnish trade union
movement categorically rejects any model that attempts to curtail living
incomes or which seeks to undermine the very basis of the welfare state.