Finnish labour market described as among most flexible in Europe
Nordic system said to bring positive employment trends
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Merja Kauhanen, an expert at the Labour Institute for Economic Research, says that by European standards, there is a relatively high amount of flexibility on the Finnish labour market. In her view, the regional and professional mobility of labour, and flexibility in working hours are at a very high level, while job security is weaker than the European average.
Kauhanen was speaking on Wednesday at a seminar on the impact of globalisation on the Finnish labour market, organised by the Finnish Economic Association and the Finnish Society for Economic Research.
There was a certain poignancy in the fact that the event was held just a couple of days after globalisation had struck a massive blow in North Karelia, where components manufacturer Perlos announced that more than 1,000 employees would be made redundant.
Backing up Kauhanen's assessment was the head of the secretariat of Finland's Economic Council, Vesa Vihriälä, who had studied the subject matter of the seminar when he compiled a controversial report on globalisation drafted by the council. Vihriälä said that regional mobility of labour has increased significantly in Finland.
"Both professional and regional mobility are probably higher than the EU average", Vihriälä said, noting that 130,000 people of working age move from one region in Finland to another each year.
These views differ from those that are generally expressed by experts in central banks and in international institutions such as the IMF, where removing rigid structures on the labour market is seen as a key task of European economic policy. If this is the case, then Finland needs to change less than many other European countries.
In Kauhanen's assessment, only Britain and Spain have a higher proportion of working people who have changed jobs and professions.
Finns hold an average of five jobs during a working career. Only Swedes, Danes, and Brits change jobs more often.
Finland is also seen as very flexible in working hours. The proportion of fixed-term employees is high by European standards, while that of part-time workers is low. Four out of five working Finns have continuous, full-time jobs.
Employment - the proportion of working-age Finns who have jobs - has improved at a higher rate than the European average. Last year, Finland was within one percentage point of the European Union goal of 70 per cent. However, the unemployment rate is still the fifth highest in the EU.
While Finland's centralised incomes agreements are an impediment to wage flexibility, Kauhanen feels that they have a positive effect, providing for moderate wage hikes, which enhance the country's competitiveness.
Competitiveness is seen as a core issue in assessing the fate of Finnish jobs under pressure from globalisation. According to Vihriälä, relatively few jobs have gone abroad - between 1,500 and 3,000 a year. He also sees future plans by Finnish companies to be fairly moderate - Perlos notwithstanding.
The potential for transferring jobs abroad in the service sector is nevertheless great. According to Vihriälä, as many as one in five jobs could be moved to countries with lower costs.
However, he does not believe that this will happen, if productivity stays high enough.
Productivity was also the topic of Mika Maliranta, head of research at the Research Institute of the Finnish Economy (ETLA), who showed a number of graphs indicating that Finland is second only to Ireland in competitiveness among industrialised countries.
"The overall picture is positive. The Finnish labour market system is not an impediment to productivity", Maliranta said.
In his recent study he also investigated the impact of ageing on an employee's productivity and pay levels. In the so-called "old sectors", such as the forest and engineering industries, the rise in both pay and productivity ran parallel with the number of years on the job.
Things were different in the electronics industry, where wages rose with age, while productivity declined already after six years on the job.
Helsingin Sanomat
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| 18.1.2007 - TODAY |
 Finnish labour market described as among most flexible in Europe
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