Health care labour dispute: government could save face by cancelling cuts in state aid

Municipalities would get more money even if state equality bonus did not grow.

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Helsingin Sanomat has learned that a new solution has been envisioned in the labour dispute threatening the health care system. Under the proposed solution, the government could direct money from increased fees for social affairs and health care and directing the revenue to local authorities. The government could also retreat on planned cuts in state assistance to municipalities.
      This would give local authorities more money to spend on personnel costs in municipal health care.
      According to this model, the state would not formally increase its share of nurses' pay costs, except for the EUR 150 million it has promised to boost underpaid predominantly female professions.
      The Union of Health and Social Care Professionals (Tehy) is demanding a pay hike of 24 per cent for health care workers employed by local authorities. The employers' side has promised a pay hike of just 12.7 per cent.
     
If there were a compromise involving pay hikes of 18 per cent, municipalities might get by next year with net costs of EUR 50 million. In 2009 the figure would be EUR 70 million.
      Pay increases for Tehy members would immediately raise the pay of about 134,000 municipal employees working in health care. A higher pay raise than in other sectors will eventually be reflected in pay demands among other municipal employees.
      If the state were to pay index-linked state subsidies for basic services, and directed the payments to the local authorities, municipalities would stand to gain EUR 55 million more this year than previously calculated.
      The pay hikes would also increase municipal tax revenue by about EUR 15 million, and state tax revenue would go up by about EUR 50 million.
     
In addition to the EUR 150 million in state funds that the government has promised to boost low-paid predominantly female professions, the nurses could benefit from two more equality bonuses at the beginning of 2008 and 2009.
      These two raises would boost the initial offer from the employers' side to the agreed upon level from the 12.7 per cent initially offered by the management side.
      Reijo Vuorento, head of planning at the Association of Finnish Local and Regional Authorities, says that the exact number of beneficiaries from such a pay hike will be specified as the process continues, but it is believed to hover around 134,000.
     
"In addition to the promised EUR 150 million, the state would direct the revenue from increased fees in social and health care to the municipalities, as the Association of Finnish Local and Regional Authorities has called for", Vuorento notes.
      The association calculates that local authorities would have to pay out nearly half a billion more if Tehy's initial demand of a 24 per cent hike is passed, and if the state contributes the equality bonus of EUR 150 million.
      Prime Minister Matti Vanhanen (Centre) and Minister of Finance Jyrki Katainen (Nat. Coalition Party) have said that no state money beyond the EUR 150 million equality bonus is forthcoming from the state budget.
     
Meanwhile, Jaana Laitinen-Pesola, chairwoman of the Union of Health and Social Care Professionals (Tehy) said on Tuesday that the union is planning no expansion of the threatened mass resignation action that it is using to push for its pay demands.
      However, Tehy still has a list of more than 3,600 employees who are willing to submit their resignations if it becomes necessary to expand the action from the 12,500 who have already signed up to leave their jobs on November 19th.
     
Laitinen-Pesola also denounced the government's calls for legislation that would force some of those taking part in the resignation campaign.
      "I hope that the solution will not be to try to use coercion to resolve a matter that can be resolved with money. I hope that it is rumour", Laitinen-Pesola said.
      She also said that the atmosphere on the mediation board set up to seek a solution has been positive, and discussions have proceeded well.
      The government is considering introducing special legislation that would force the nurses to maintain a minimum presence at hospitals for dealing with cases requiring the most urgent attention. To pass the law in time, Parliament would have to be in session through the weekend.
      The proposals have come under criticism from the political opposition. Both Social Democratic Party chairman Eero Heinäluoma and Left Alliance chairman Martti Korhonen said that they would oppose any attempt to restrict the right to take industrial action


Previously in HS International Edition:
  Government prepares legislation to keep some nurses at work (6.11.2007)
  Mediation board begins efforts to reach settlement in labour dispute between nurses and municipal employers (1.11.2007)
  Labour market experts doubt nurses will get pay hikes they want (22.10.2007)
  Looming labour conflict would affect paediatrics, maternity, and surgery in Helsinki area (18.10.2007)
  Nearly 13,000 nurses ready for mass resignation (15.10.2007)

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