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Workers' real earnings dipped six percent in Q3 2022

The dip in the value of wages was the biggest in 60 years, according to Statistics Finland.

Henkilö pitää kädessään euroseteleitä pankkiautomaatilla.
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Yle News

The value of wages earned by workers in Finland dipped some 5.7 percent in the final quarter of 2022 compared to a year earlier, according to preliminary data from Statistics Finland.

The initial figures show that the index of wage and salary earnings maintained by Statistics Finland rose 2.7 percent in the period between October and December, compared to 2021. However the inflation index rose considerably faster.

The index of wage and salary earnings is a measure of the nominal value of pay for those in full-time employment.

"The steep rise in consumer prices has clearly weakened the development or real earnings," said Statistics Finland in a press release.

"According to preliminary data wage-earners real incomes fell 4.4 percent in 2022 [on an annual basis]. The numbers could be fine-tuned slightly, but the drop is almost certainly the biggest in more than 60 years. The last time real incomes dropped more than in 2022 was in 1957, when the fall was 7.5 percent."

Statistics Finland said that real incomes have fallen by four percent or more on only four occasions in the last 70 years. In addition to those four years real incomes contracted in six years, but only by between 0.5 and 1.5 percent.

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Municipal sector a pay laggard

The data suggests that during the final quarter of 2022 nominal wages rose by 2.8 percent in the private sector, 2.4 percent in national government jobs and by 2.5 percent in local government compared to one year earlier.

The average nominal wages rose by 2.4 percent over the whole of 2022. On an annual basis the earnings level rose the most in the private sector and the least in the municipal sector.

"The average development in the municipal sector was behind the other sectors because the municipal sector's mandated annual raises took place later in 2022 than they did in 2021," said Statistics Finland.

"In the private sector wage levels rose more in part because of larger bonuses."

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