Trade unions and employers agreed a new two-year contract on pay and conditions last week, but what does it mean for them and what does it mean for you? We tried to answer three questions about the big news from the labour market.
1. How much will wages rise?
The two-year contract will see wages for workers covered by the industrial sector deal rise by around seven percent altogether. This year workers in the affected sector will see wages tick upward by 3.5 percent and receive an additional one-time payment of 400 euros. The cost impact on employers is estimated at around 4.5 percent.
Next year will see an additional two percent increase, with an additional half a percentage point to be distributed as employers see fit. The cost of that to employers is therefore 2.5 percent.
The contract covers around 90,000 workers.
In the chemicals sector, the total impact of the pay deal is the same, at around seven percent, but this year's raise is 2.2 percent plus a one-time payment of 800 euros. Next year wages rise by 3.3 percent, with an additional 0.2 percent to be distributed at a local level.
2. Is the wage rise big or small?
The negotiations focused on how much wages should keep pace with rising prices. Last year consumer prices rose strongly and that pace has more or less continued. That means wages are worth less all the time— last year real wages shrank by around four percent on average, thanks to inflation.
The pace of inflation is expected to slow in coming months, with the Bank of Finland forecasting an annual inflation rate of five percent for 2023. This means that the agreed 4.5 percent wage increase will not keep pace with inflation.
At the same time, the 2.5 percent increase agreed for next year is larger than the 1.6 percent prices are forecast to increase.
3. How will the deal impact people not employed in those sectors?
The most immediate effect of the agreement is the cancellation of industrial action. As soon as the agreement was reached, the Industrial Union announced it would be calling off all planned strikes, strike threats and overtime work bans.
This agreement between employers and employees of Finland's biggest export sectors, could pave the way for other sectors negotiating better working conditions.
Municipal workers, including educators and healthcare staff, are also set to largely benefit from the deal. In their pay dispute, municipal and wellbeing service county workers agreed that if agreements in other sectors exceeded their own pay increases that were determined last autumn, they would receive the difference. This agreement covers some and 300,000 workers and is expected to cost employers of that sector an additional 600 million euros.