Helsinki (04.05.1998 - Kimmo Kevätsalo) We have constructed our union activism in the Nordic countries on the basis of a labour sales monopoly. The unions have sought to gather all employees working in an industry into a common cartel in which an agreement is made on a minimum wage and then nobody works for wages below the minimum.
If somebody, an unemployed worker for example, tries to break the cartel, then the organised workers take action to resist this. Employers are aware of this and usually honour the conditions of the cartel, i.e. the minimum conditions set out in the collective agreement.
It is a condition of the viability of such a cartel that the employers and workforce remain within the area covered by the agreement. Normally this area is defined by international borders.
This traditional basis is now seriously threatened. The character of the export industry, the workers of which are understood as the élite force of the trade union movement, has changed from national to global. This trend has been especially rapid since the mid-1980s.
The major features of this globalisation are the effort to concentrate on so-called core business in order to be globally competitive, and the desire to situate production near to markets and preferably in low-wage economies. The textile, garment and leather industries have long engaged in production in low-wage countries, but other industries are now following suit as the Central and Eastern European labour and consumer markets open up. News stories appear every day about Finnish companies launching operations in Poland, Slovakia, Hungary, Estonia or Russia.
According to a new report by Jyrki Ali-Yrkkö and Pekka Ylä-Anttila, fifteen years ago 22 major industrial companies in Finland employed a total of 214,000 workers. Only 29,000, or 14 per cent of these worked abroad. Although the total number of staff of these companies in 1995 was 50,000 employees greater, the proportion of those working in Finland had altered dramatically. The number of employees in Finland had fallen by 50,000 and the number of those working abroad had increased by 93,000. This means that in 1995 almost half of the staff of these 22 companies worked outside of Finland.
Understood globally, these 22 major industrial corporations were successfully meeting their obligation to create employment, but from the point of view of the labour force in Finland the results are not as comforting.
The 22 companies are the leading engineering, forest, chemical and foodstuffs industry enterprises in the Finnish export sector. They play a decisive role in the employer and sectoral associations of their own industries. Almost half of their employees work in countries which are beyond the reach of the labour sales cartel created by the Finnish trade union movement.
The unions representing the labour force of the 22 companies have traditionally been the backbone of private sector collective agreement negotiations in Finland. Now, however, one has to ask what kind of support there can be from a backbone from which half of the vertebrae have been removed.
In the new situation the trade union movement may choose between three main alternatives or various combinations of them.
The movement can try to create an international labour sales cartel on the European or global level. However, anyone who has studied international co-operation can bear witness to how expensive and time-consuming such efforts are, even when confined to the EU, let alone the rest of Europe and other continents.
The movement may also try to form company-based international cartels. This kind of model has recently been proposed by Jarmo Lähteenmäki, chairman of the Finnish Paperworkers Union. Such a strategy will have some prospects of success in the paper industry if the companies can agree on the model to be adopted. The rate of union membership in the main producer countries is high and production is centralised, making the companies susceptible to influence from a worker cartel.
Even in the paper industry, however, production is spreading rapidly to countries where the trade union movement does not exist or at least is not listened to.
Co-operation between the trade union movement and employers offers a third alternative. This would pursue an efficiency strategy which would defend Finnish high-wage jobs against global product and labour market competition. The central element of such a strategy would be to increase radically the skills, commitment and entrepreneurialism of employees.
This would require employers to change their present wasteful use of labour, while the trade union movement would have to accept the changes.
Most of the representatives of both parties continue nowadays to adhere to old ways of using labour. One consequence of this is that more jobs will be moved away from Finland.
Published originally in SAK's magazine Palkkatyöläinen 20-97 (10.11.1997). Kevätsalo works as labour researcher at the Metalworkers’ Union.