Finland’s Right-Wing Government Wants to Rip Up Its Welfare State
In Finland, a conservative government including the far-right True Finns has launched a Margaret Thatcher–style attack on job security, unemployment benefits, and the right to strike. Trade unions are fighting to defend the country’s storied social model.
Chairperson of the True Finns Party Riikka Purra at an election debate in Helsinki, Finland, on March 29, 2023. (Markku Ulander / Lehtikuva/AFP via Getty Images)
- Interview by
- Daniel Kopp
After World War II, Finland’s militant trade unions created one of the world’s strongest welfare states. Today, the country spends more on the welfare state than any other OECD (Organization for Economic Co-operation and Development) country, at around a quarter of GDP. Finland regularly tops the rankings of the happiest countries in the world and is arguably one of the most successful examples of the social democratic model.
At the heart of the Finnish class compromise is the tradition of social dialogue between unions, employers, and the government, which has led to annual nationwide and sectoral negotiations on wage setting for all union members, tripartite negotiations on new legislative proposals, and the expansion of the welfare state. But this social contract is about to be torn apart by a newly elected right-wing government.
While Finnish politics made international headlines in recent years with a center-left coalition led by five women and headed by the young social democrat Sanna Marin, a radicalized right won a majority in the last parliamentary election in April 2023. As a result, the conservatives, the Christian Democrats, a Swedish minority party, and the far-right Finns Party formed a government. Since then, the coalition has launched the strongest attack on workers’ rights and social security in the history of the Finnish welfare state.
Annika Rönni-Sällinen is president of Finland’s Service Union United (PAM). Daniel Kopp asked her about what the plans mean for the welfare state — and what her union is doing to respond.
After only three months in office, Finland’s right-wing government has launched an aggressive attack on workers’ rights and the welfare state, with parallels to Margaret Thatcher’s post-1979 neoliberal program. Can you give us a sense of the magnitude of the proposed reforms?
It’s hard to describe it because it’s such a massive package of cuts and reforms. There are maybe thirty or forty different proposals the government is pushing through by force. They are attacking the social security system, including unemployment benefits, and, at the same time, weakening job security in several ways. Furthermore, they want to change many principal elements of workers’ rights, like the right to strike, and the model of wage negotiations in the labor market.
We have never seen anything like this before. There really are no negotiations. In Finland, we have a long and established history of tripartite negotiations between government, employers, and trade unions. Usually, tripartite committees or working groups prepare and negotiate such laws and allow the trade unions to present our own proposals. But in this case, the government is going ahead with fully fledged proposals ready to be implemented, and they leave no space for negotiations.
What are the most dangerous reforms both on workers’ rights and on social protection?
Let’s look at unemployment protection, for instance. A lot of our members in the service sector work part time because there are no full-time jobs. These workers already cannot make ends meet and have to rely on adjusted unemployment benefit and housing allowance. The government is now cutting these benefits, which could amount to €300 or €400 per month. It’s hard to imagine how these people could survive with hundreds of euros less. But then how are they supposed to work more if there are no more full-time jobs?
On workers’ rights, they are making it much easier to fire workers. Nowadays, in Finland you can only fire someone on “serious grounds” for dismissal. They want to change that to make it easier for employers by using the vague language of “relevant grounds.” Similarly, the proposals would increase the number of fixed-term employment relationships, as there would no longer be an obligation to present special grounds for temporary employment.
In addition to this, there are the many other ways in which they are restricting the right to strike, limiting the involvement of social partners, and the right to collective bargaining. That’s really serious.
They also seem to be very strategic in their approach: starting with restrictions to the right to strike as that will make it harder for the labor movement to fight back against the other cuts.
Yes, definitely. For instance, fines for illegal strikes would increase significantly if the government gets its way. The highest fines would go up to €150,000, the lower limit would be €10,000. Nowadays the maximum fine is €23,500 without any lower limit. Ordinary workers could also be fined. There would be a €200 penalty fee if a worker took part in a strike already declared illegal by a court. But it’s somewhat unclear what would constitute an illegal “continued” strike.
Our representatives in the working groups also questioned the purpose of the restrictions on political strikes, since we haven’t had that many in the past. We asked the government about their reasoning, and they simply responded that, well, there might be some strikes coming!
So, they are rather more worried about future actions against the government’s plans than about past problems with this system.
As you mentioned, Finland has a social contract based on an established system of social dialogue. It seems like the government is intent on breaking with it?
That’s really what’s going on. In its program, the government has promised to the implement employers’ wishes with no place for negotiations. The government is even intervening in places where it never has before, for example by limiting our possibilities to negotiate wages and changing the role of the national conciliator. For instance, if we issue a strike warning, we will be forced to go to the conciliator’s office and continue negotiations. Under the reforms, the conciliator’s hands would be tied in that her mediation proposal could not exceed the general level of wage rises.
How does the government justify these reforms?
They argue that these reforms have already been made in the other Nordic countries. But that’s not true, they are just cherry-picking the bits that favor the employers’ side. They also put forward a target of creating a hundred thousand jobs through the reforms, and cut down the national debt which, they argue, is too high. However, neither of these targets are achieved as promised. The government keeps borrowing as it has before while reducing the state’s income by lowering taxes and creating special tax relief to those who earn more than €90,000 a year. And it has become clear that the employment figures are massively exaggerated.
When the new government was formed in June, did you expect them to be so aggressive in pushing these reform through?
No. Of course, we knew that they would push for measures we would not be happy with. But we never imagined the scope of these different kind of cuts in social protection. Around eight years ago, we already had a right-wing government and we thought that was bad. But even then, they tried to find some sort of middle ground.
The government wanted us to negotiate with the employers and there were measures the employers’ side didn’t like. Now, it’s all for the employers, all the proposals they have pushed for in the last ten or twenty years. It’s extremely ideological. They want to get rid of our system of tripartite negotiations. They want to weaken our trade union movement. And they are taking money from the poor, while lowering taxes for the rich so they get even richer. A lot of people feel that this is really unfair.
Earlier in October, the Central Organisation of Finnish Trade Unions (SAK) announced three weeks of coordinated action, with walkouts at various workplaces every day, in which your union is taking an active role. How did the first few days of action go, and how will you proceed further in case the government doesn’t abandon the reforms?
We have organized these demonstrations in many marketplaces around Finland and a lot of people joined in. They have definitely been a success. People are very angry. Of course, we wish the government would think twice and listen to us, but it doesn’t seem like they are backing off at all.
That means we will continue with these actions and we are planning new ones. So far, what we have done has been quite moderate. But of course, we will turn up the heat if nothing changes.
The far-right True Finns Party (now rebranded “the Finns”) presents itself as representing the interest of ordinary people, but is fully backing and promoting the reforms. Do you think this has already led to a shift on how they are perceived, in particular by its supporters?
We haven’t had polls in Finland for a few weeks. But from speaking to those who participated in the actions, I had people who almost cried, saying they voted for True Finns and now there’s nothing they regret more. So, it seems like they are losing some of their voters at the moment. We will have a clearer picture once the next poll comes out.
I wonder how the developments in Finland speak to broader political trends in Europe?
Mostly, it seems a little weird to me that the Finnish government is trying to get rid of social dialogue in the country, while the minimum wage directive on the European level foresees promoting social dialogue, collective bargaining, and so on. Especially in the last term, the European institutions have taken some progressive measures. So, we are really going in the opposite direction here.