(Riga 30.03.2000 - Juhani Artto) Latvia, one of the three Baltic countries to the south of Finland, began official membership negotiations with the EU in February. The other two Baltic countries, Estonia and Lithuania, are also officially negotiating on membership.

While the more optimistic Latvian ministers claim that the negotiations will be completed by 2003, most experts believe that a longer period will be needed.

In any case, it is highly probable that labour, goods and capital will cross the Gulf of Finland freely in the not-too-distant future. This means that Finnish employees have a special interest in the evolution of the labour market in the Baltic States.

One nightmare scenario envisages a continuing gulf in living standards between Finland and the three Baltic countries lasting right up until their accession to the EU. Labour intensive sector enterprises in particular are attracted by the low pay levels of the Baltic countries. Employees in the Finnish garment industry are already painfully aware of this competition, as many enterprises have relocated production to Estonia.

A persistent low-pay economy is also a nightmare scenario for workers in the Baltic States. Wage and salary earners in Latvia make an average of USD 300 a month, from which they still pay a substantial portion in taxes and social security contributions. The minimum monthly wage is only USD 100. One worker in eight works at this minimum rate. To add to the misery there are even employers who are unwilling to pay the minimum.

Nordic trade unions financing more than 100 projects

Although the trade union movement is striving to improve working conditions, the labour market of the Baltic countries is more of a buyer's dictatorship than an equal partnership. The arrival of foreign investors has not improved the situation.

"Trade unions often face the most difficult challenges in foreign-owned enterprises", says Juris Radzevics, President of Latvia's central trade union confederation LBAS. According to Latvian trade union leaders, Nordic companies take a much harsher attitude towards the trade unions in the Baltic countries than they do at home.

Work is going on to change this state of affairs as all trade unions in the Baltic Sea region (the Nordic countries, the Baltic States, Germany, Poland and Russia) redefine and strengthen their mutual cooperation. The Nordic trade unions currently finance more than 100 projects seeking to reinforce the trade union movements of Estonia, Latvia and Lithuania. The Finns have played a powerful role in these projects. All three central trade union organisations in Finland: SAK, STTK and Akava, together with many of their affiliated unions and local branches, provide significant inputs of finance and expertise in the projects.

The start of EU membership negotiations has increased the urgency of cross-border trade union cooperation, as these negotiations provide a unique new channel of influence. Latvia and the other candidate States must reform their labour markets to meet European Union standards before full accession to membership. This is the common policy line of all European trade unions and corresponding pressure has been brought to bear on decision makers in Brussels. There should be no compromise over the terms of membership. The right to organise and collective bargaining are among the minimum conditions.

One in four Latvians belong to the union movement

The right to organise and collective bargaining have not been fully realised in Latvia. One important obstacle is fear. Union activists have plenty of evidence of employer discrimination against organised labour.

One fourth of Latvia's 800,000 employees have joined the unions. The organising rate in the public sector is higher than in the private sector. 60 per cent of the organised labour force are women. The teachers' union, with 52,000 members, is clearly the largest union. The two health sector unions together have a total of 20,000 members.

Although union membership fell sharply in Latvia in the 1990s, this trend has recently come to an end for practical purposes. The decrease resulted mainly from the splitting up and privatisation of large state enterprises and collective farms.

The organising rate in Estonia and Lithuania is clearly lower than in Latvia.

In Latvia there is a new mood of optimism among young people joining the unions. About twelve per cent of the membership are under 25 years of age and the unions are strengthening their youth sections. Juris Radzevics, the lawyer who became LBAS president in 1998, is only 30 years old. Radzevics joined the union movement nine years ago when Latvia regained its independence.

Although the tripartite bargaining model is more developed in Latvia than in its neighbouring Baltic States, the Latvians have rather few agreements covering entire industries and enterprise-specific agreements have a more established status. There are more than one thousand such agreements.

Most employees rely on individual employment contracts. The protection which these provide is underpinned by a law which, in certain situations, entitles the unions to forbid the dismissal of an employee.

One of the major goals of LBAS and its 26 affiliated unions is to increase the number of collective agreements. One obstacle to this identified by Radzevics, however, is the weakness of the employers' federations.