unions reject a new initiative to cut young people's pay
Helsinki (05.03.2013 -
Heikki Jokinen) The Prime Ministers' Office published last Friday a report
demanding more low-pay work in Finland. The report is drafted by Juhana
Vartiainen, the Director General of the Government Institute for Economic
Research and Osmo Soininvaara, the Green Party MP and one of the party’s
They propose that those
under 25 years should receive salaries 20 per cent below what is set out in
the collective agreements, with the sweetener of a reduction in the tax rate
for those affected.
As one might expect, the
trade union reaction was swift. Timo Vallittu, the President of the
Industrial Union TEAM expressed amazement at the proposal for a zero per
cent pay raise line. "The price of work is only one part of economic growth.
Others are e.g. the price of energy and raw materials, taxes and logistics.
If growth suffers, it is unfair that only pay should suffer as a result.
This is especially the case if problems are dependent upon developments
Vallittu stresses also
that a cut in wages and salaries for young people would automatically make
them low paid and that would inevitably set a trend in the labour market.
Their parental benefits, sickness allowance and pensions would also remain
smaller, Vallittu adds.
Timo Koskinen, the chief
lawyer of the Trade Union Confederation SAK said that the proposal for lower
salaries for young people is illegal. "Lower salary on the basis of age is
an impossible thought, as it is discrimination. No one can choose his or her
age or gender."
Koskinen also sought to
remind everyone that already now many collective agreements make it possible
to pay a smaller wage or salary if the worker is a trainee or without formal
Matti Tukiainen, the
Director of employment and sustainable growth at SAK remembers how a young
people's salary scale was introduced at the beginning of 1990's in order to
create new jobs. "At the end of the decade the University of Vaasa conducted
research into the results and found that no new jobs for young people were
Leila Kostiainen, the
Secretary General of the Finnish Confederation of Professionals STTK also
comes out emphatically against lower youth wages and salaries. "So far the
measures to cut the cost of young workers have not had any special effect on
youth employment. In Europe there are also warning examples of permanent low
cost youth labour markets in countries where youth unemployment is still
Kostiainen, however, says
that some of the proposals put forward to streamline housing allowance,
active labour policy and social security are a good basis for further
The report includes 23
proposals. Some of these involve new subsidies for employers such as
transferring a larger proportion of employee illness costs to the Social
Insurance Institution (Kela) and paying 5,000 euro to an employer when a
woman returns to work from maternity leave. Vartiainen and Soininvaara also
propose to make it easier to lay off employees in small companies.