Finance Minister offers extensive agreement on employment
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Minister of Finance Jyrki Katainen (Nat. Coalition Party) is proposing to the government parties, the opposition, and labour market organisations an agreement that secures employment.
He disagrees with Prime minister Vanhanen’s proposal to raise income taxes on high income-earners after the economic crisis is over.
Katainen’s idea is that political groups should commit to the freezing of income taxes, and that labour unions should agree to moderate pay increases.
Katainen’s concern is that Finland might not prevail in international competition once the economy starts to recover. To keep Finland from losing jobs, labour costs need to be kept under control. He notes that the costs per unit of Finnish labour is above the average for the euro zone.
“I propose an employment contract that would require a psychological commitment from the government and opposition parties and the labour market organisations to maintaining competitiveness and the sensible maintenance of buying power during this government and the next”, Katainen said.
“The idea would be that the unions would know, as they sign contracts, that buying power would go down because of tax increases, and that there is no need to demand high nominal wages for that reason”, the minister says.
Katainen promised to promote the policy even if the National Coalition Party is in opposition after the next elections.
So far the idea of an employment contract is Katainen’s own proposal, but he hopes that it might win support.
Katainen’s proposal is seen as an extended hand toward labour unions, which have been calling repeatedly for some kind of framework agreement involving employment policy, economic policy, and labour agreements.
However, Katainen does not want anything in writing.
The Minister of Finance has seen willingness on the wage earner side to bear responsibility in the pay contracts that have been made. However, he is concerned that there are pressures to raise pay in a number of female dominated professions in the municipal sector.
If unions start pushing for very high pay increases, Katainen is afraid that the government’s stimulus measures might come to nothing.
More on this subject:
 Tax hike proposed by Vanhanen would affect hundreds of thousands
Previously in HS International Edition:
Vanhanen calls for higher taxation of earners of high incomes (30.11.2009)
Helsingin Sanomat
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