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Trade Union News from Finland

Trade 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 chief ideologists.

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 outside Finland."

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 competence.

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 created."

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 very high."

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 discussion.

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.