Helsinki (01.12.2003 - Leena Seretin) The Finnish labour market consensus is the envy of many other countries in Europe. "The centralised collective bargaining model is quite alive and well," says research manager Timo Kauppinenof the European Foundation for the Improvement of Living and Working Conditions in Dublin.
The labour market organisations in Finland reached a calm accord on the future of the pension system, which the national government then approved. At the same time future pensioners have quite often taken to the streets in massive rallies and fiercely opposed pension reforms in the older European countries such as Germany and France, even though here, too, such adjustments must be made.
Timo Kauppinen regards the pension reform as an excellent example of the vitality of the Finnish labour market model, and of how well it is able to guide progress to satisfy future needs.
"The functioning of the Finnish agreement model can be judged by comparing Finland with several other EU Member States, where wavering and poor anticipation of progress increases general insecurity."
Within the European Union only Belgium and Ireland have a centralised collective bargaining model comparable to that of Finland. Of the new Member States, Slovenia reached a comprehensive settlement in spring 2003, and efforts have also been made to establish such bargaining elsewhere.
"The Finnish model is also characterised by confidence in local agreement. While the major issues are agreed centrally, matters are also decentralised for agreement at places of work."
American model creeps into Europe
European unions favour a three-tier system and overall agreement between labour market organisations. The aim is to resolve the problems lurking in free labour markets by means of social dialogue. The European Commission seeks to encourage the labour market partners to agree on matters without Directives resulting in legislation. These negotiations are currently focusing on stress at work.
However, Europe remains the only continent where social dialogue is favoured, and researchers are studying the global competitiveness of the model. The alternative is the highly individualistic, decentralised US agreement model which, in Kauppinen's view, actually operates in the United Kingdom with France not far behind.
"The new European Union Applicant States seem to use the US agreement model. Agreements, where any exist, on pay and working conditions are concluded at the individual level. This challenges the old European Union Member States. In the Applicant States the price of labour is a fraction of the pay level in old Europe, and the new Member States will attract investment and capital."
While Kauppinen does not think that the agreement model, based on collective bargaining has lost the battle, he admits that it faces a serious challenge.
Social capital from the trade union movement
Working life researchers have noticed that the organising rate is rising in the USA. One reason for this is the information economy, in which people are scattered around and the employer is faceless, unlike the situation in industrial societies where large factories gathered employees together and created an arena for collective action against "the common enemy". Nowadays the search is on again for collective connections and consciousness.
The trade union movement may once again be charged with the task of social networking and serving as social capital, Kauppinen feels. This is also anticipated by American researchers.
"While this is possible, the social network will not play an especially significant role. The trade union movement arose in response to a genuine "common enemy", out of a struggle situation in which common action had to be considered in order to solve problems."
A high organising rate seems to be of little significance when trying to have an impact on rapid movements of capital in the global economy. In Finland the Metalworkers Union is strong, but even Finnish enterprises have relocated to low-pay countries leaving behind unemployment and unused skills. Kauppinen cannot cite a single example in Europe of trade unions succeeding in preventing the flow of capital towards low-pay countries.
"Capital emigration lies beyond the sphere of influence of the unions. In Ireland there are examples of productivity and development programmes made at places of work, but these have not necessarily brought the expected results."
Besides unexpected capital emigration, the trade union movement is challenged by an increase in atypical employment. Kauppinen feels that this situation will continue, as businesses in the information and network economy need a mobile labour force.
"However, not everyone will work in mobile trades in the new economy either. I believe that the heavy industry unions will also continue to be powerful and influential in the future, although their membership will not necessarily grow."
*Published originally in Ahjo 19-2003. Ahjo is the magazine of the Finnish Metalworkers union.