Employers' Fagernäs: Unions' wage demands cannot be accepted

Leif Fagernäs

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Leif Fagernäs, the Director-General of the Confederation of Finnish Industries (EK), says that Finland’s employers have no intention of agreeing to the kinds of wage increases demanded by trade unions recently.
      Unions have called for a replication of the pay hikes of just over two percent, which were part of the present incomes agreement that runs out next year. On Thursday, Fagernäs dismissed the demands as too high.
      "It is out of the question that the incomes agreement would be made on the basis of the previous percentages", he said at a lunch for political journalists.
      Fagernäs pointed out that productivity and competitiveness had grown only in a few sectors.
      "In our wage hike capacity we are on the minus side. Our main markets are in fields of low development, and the prices of our main products - electronics and paper - have declined all the time", Fagernäs explained.
     
The best result for employment and buying power in Fagernäs’ view would be low pay hikes combined with significant tax cuts.
      Fagernäs noted that the employers’ side has not said anything about the exact level of pay increases, but he repeated a proposal by the Ministry of Finance for 0.5% pay rises, linked with tax cuts.
      "We are looking for a change to the previous practice - that is, the methods and formation of wage increases", he said.
      He also noted that the forest industry in particular wants flexibility in working hours and in the paying of wages, which would take stoppages in production into consideration. Fagernäs said that the aim is not to cut wages, but rather to increase production.
      On the issue of dividends paid by companies, Fagernäs noted that dividends must be paid because an international company must take its owners into consideration. He rejected the juxtaposition of dividends and capacity to raise wages, because it is the owners who define the goals of a company.
     
The management side now wants the unions to change their goals for a centralised incomes agreement.
      "Our main goals were set already in the summer, and we do not see any need to alter them", Fagernäs said.
      The failure of a centralised agreement with trade union confederations, and negotiations on the level of individual unions, has usually led to strikes, and has ended up costing employers more than if a settlement is reached. Fagernäs says that EK is ready to take that risk.


Previously in HS International Edition:
  Employers postpone launch of incomes talks - unions surprised (4.10.2004)
  Labour union leader says wage model will be most difficult issue in incomes talks (16.8.2004)
  Employers keep door open for incomes agreement, call on unions to reassess demands (7.10.2004)
  Trade Union confederations still want incomes talks (5.10.2004)

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