Split in labour movement over call for legally-mandated minimum wage

STTK’s Mikko Mäenpää wants to keep pay and social benefits separate

Mikko Mäenpää

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Not all labour unions are enthusiastic about the idea of a common minimum wage for all. Lauri Lyly, the new President of the Central Organisation of Finnish Trade Unions (SAK) has proposed that a minimum wage could be set at EUR 1,500, for instance.
     Lyly recently proposed that the labour contracts of all SAK-affiliated unions should have a set minimum monthly pay level of EUR 1,500. As Lyly sees it, everyone should be able to survive on what they earn without having to resort to welfare benefits.
     
Finland does not have a legally set minimum wage. Each profession has minimum pay levels set in their labour contracts.
      Mikko Mäenpä, President of the Finnish Confederation of Professionals (STTK) says that at first glance, Lyly’s proposal might sound good, but it is based on the false premise of “base level social security”, and as such is akin to the idea of a citizen’s wage, or a guaranteed pension. Mäenpää feels that wages and social benefits should be kept apart.
     “It would be a movement away from the respect for work promoted by the labour union movement. Wages, and social benefits, should have some connection with work”, he says.
     
Mäenpää notes that negotiations on pay packages involve assessments of productivity, on which basis decisions are made on how big a part of the result should go to the wage earner.
     “This means that the labour market partners need to be able to assess how labour is to be priced according to the markets and to fairness, and also to establish a minimum wage. Those who do not believe in this, do not believe in the whole labour market model”, Mäenpää says.
      He points out that on the labour side, union members have decided on minimum pay by allowing their negotiators to bargain for them. “If members do not accept this, then they will certainly vote with their feet.”
     
Mäenpää does not believe that raising the lowest wages would be possible without it being reflected on the whole pay scale.
     “According to international statistics, our minimum wages are not the lowest by far, but the pay levels of many well-educated groups of white collar workers are clearly lower.”
     Mäenpää feels that it should be acknowledged that if the lowest wages are raised, mid-level pay and the highest salaries should also be increased.
     
Mäenpää feels that the labour movement should be more concerned about the changes in the distribution of labour sparked by globalisation - that is, on the growing proportion of capital income compared with income from labour.
     “This could be a big question in the post-financial-crisis world: how to give labour the value it deserves compared with economic speculation.”
     “The earnings of corporate managers have also grown to spheres that are quite apart from other salaries. There is no proportionality there any more.”
     Mäenpää points out that corporate managers like to say that pay should be determined according to the demands of the work. He notes that there is no such proportion in the gap between the pay earned ordinary workers and that of the CEO of a company.


Links:
  STTK website
  SAK website

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