Finland’s Right-Wing Government Is Trying to Crush Labor
Proposed labor reforms in Finland have sparked strikes, shutting down everything from ports to kindergartens. The right-wing government refuses to negotiate in its drive to dismantle the Finnish model of collective bargaining.
Finnish prime minister Petteri Orpo attends a press conference at the Chancellery on July 14, 2023 in Berlin, Germany. (Carsten Koall / Getty Images)
For the past two centuries, Helsinki’s Senate Square has been a symbol of academic, clerical, and government power in Finland. The main campus of the University of Helsinki lies on the western side, and the Government Palace, housing the Cabinet Office, on the east; overlooking the square from the north are the facade and green domes of Helsinki Cathedral.
This February 1, Senate Square saw some thirteen thousand striking workers and their supporters assemble in the midday winter sun, to protest against Prime Minister Petteri Orpo’s government, a coalition of center-right and far-right parties. A nationwide day of action had been called by SAK and STTK, the largest confederations of Finnish trade unions. Some three hundred thousand workers, from lorry drivers and electricians to kindergarten teachers and white-collar office workers, across the country were on strike.
A month and a half later, the standoff between the trade unions and the Finnish government is ongoing. As of mid-March, seven thousand dockworkers and industrial workers are on strike, grinding the country’s maritime exports and some imports to a standstill.
Even beyond the stoppages themselves, tensions have escalated more widely. Forestry conglomerates Stora Enso and UPM have stopped paying wages to their employees because their products cannot be exported, even though they are not on strike. The unions call this an illegal lockout.
This action is severe — but so are the issues, claims Turja Lehtonen, the vice chair of the Industrial Union. With two hundred thousand members, the Industrial Union is Finland’s biggest. And Lehtonen is surely right to say that the stakes are extremely high for the labor movement. In a sense, the current strikes are a make-or-break moment. If the government succeeds, its reforms will swing the balance of power in workplaces and society away from workers and their representatives and toward business owners and shareholders.
Before the current administration, political strike action against a government was rare in Finland. But provocations by the current administration have made it increasingly common. Indeed, the current government, which took office last June, has already inspired more politically motivated industrial action than all Finnish governments from 1991 to 2023 combined. What’s going on?
Swinging Rightward
In Finland’s general election of April 2023, voters swept the center-left coalition government of Prime Minister Sanna Marin from power. Finnish right-wing parties — namely Orpo’s center-right National Coalition Party (Kokoomus) and Riikka Purra’s radical-right Finns Party (Perussuomalaiset) gained a combined ninety-four seats in the country’s two-hundred-seat parliament.
The theme that dominated the election campaign was Finland’s national debt. The Right claimed that Marin’s government had mismanaged the country’s finances and taken on an irresponsible amount of borrowing.
While it is true that the national debt increased under the Left’s watch, Marin’s government faced two crises unprecedented in their scale since World War II: the COVID-19 pandemic and the full-scale Russian invasion of Ukraine. Both crises were significant shocks to the national economy and required debt-driven government investment to keep the economy up and running. Nevertheless, the Right argued that spending was out of control, and that drastic budget cuts were now required to keep the debt manageable.
After the election, the large right-wing parties teamed up with the smaller conservative Christian Democrats and the liberal Swedish People’s Party to form a new government with a thin majority of nine seats. The government was sworn in last June 20, after eleven weeks of prolonged negotiations.
When the new government announced its policy program, it was immediately met with resistance by the Left and the unions. The government declared that it would make it easier for bosses to sack employees (though protections are already weaker than the norm for the Organization for Economic Co-operation and Development), abolish legally mandated sick pay for workers’ first day of illness (thus encouraging the ill to come into work), and restrict workers’ rights to political strikes.
Another proposal is to devolve more collective bargaining to the local, company level. This would mean that in the future, every company could negotiate its own collective agreement, clearing a path for the end of multiemployer, sectoral collective bargaining. This has ground the gears of the trade unions because it would undermine the national collective agreements.
Finland does not have a minimum wage law, but sector-wide and universal collective agreements have long been a backbone of Finnish trade unionism. Universal collective agreements ensure fair wages and decent working conditions for all workers, even if their own workplace is not organized.
Furthermore, the government is planning to legislate an “export-driven” model for collective bargaining. If implemented, this reform would effectively set a ceiling for wage increases. This would favor workers in export businesses, such as forestry and mechanical engineering. The Orpo administration and employers’ federations have argued that Finland’s economy cannot withstand higher wage increases for workers in the public sector vis-à-vis the exporting industries. The government also argues that the export-driven model would boost economic competitiveness.
The cap on wage increases would make it practically impossible for workers in industries such as service and care to bargain collectively for better pay rises than those in the exporting industries.
Finland also has one of the most segregated labor markets in the developed world: women work disproportionately in the service sector while men dominate the exporting industries. The trade unions and the main left-wing opposition parties have poignantly dubbed the government’s model a cap on wage increases for women.
These policies, combined with a wholesale slashing of unemployment benefits and social security, were straight from the playbook of the employers’ organizations, who generously financed the campaigns of the right-wing parties in the election. It is worth noting that these policies received very little attention during the election campaign, and some of them were even directly opposed by the Finns Party.
Immigrants in Finland are now facing a double whammy from the government. First, it is making coming to the country and gaining citizenship more difficult. Second, those immigrant workers who are already in Finland are going to suffer more than the average Finn, since they work disproportionately in the service sector, where workers tend to rely more on social security to supplement their wages. The Orpo-Purra government also plans to loosen regulations on collective bargaining, exposing immigrant workers to exploitation and wage theft. It further intends to establish a separate system of social security for immigrants — a proposal incompatible with Finland’s constitution.
The government argues that there is no alternative, and that its policies are absolutely necessary in order to cut the country’s deficit and to regain competitiveness for the Finnish economy. However, this is mostly a pretense: the policies now pursued by the Orpo-Purra government fulfill long-standing dreams of Finnish big business. As historian Maiju Wuokko has pointed out, the employers’ federation EK has argued for similar policies for decades, regardless of the economic cycle.
Unions Out of the Way
Finland’s trade union movement has traditionally been very strong. More than 75 percent of those currently working or looking for work are members of trade unions. This makes the labor movement a significant force in society and a voice to be heard when determining labor policy.
In the past, legislation concerning work had been determined in tripartite negotiations between the trade unions, the government, and the employers’ organizations. The tripartite system was trashed in the 2010s, when the employers’ organizations deemed it outdated and unilaterally broke away from it.
Big business in Finland hoped it could win more by transferring power from the tripartite negotiations to governments and parliament. The logic seems to have been that if the employers could influence future governments by financing the election campaigns of the right-wing parties, businesses could get more favorable policies from right-wing governments than they ever could through negotiations.
Since then, right-wing governments in Finland have taken efforts to strip the unions of their political power. The previous right-wing government introduced the last of the tripartite collective agreements, the so-called “competitiveness pact,” in 2015. It was met with widespread resistance and large protests in 2015, but eventually the unions folded and signed the pact. As a result, working hours were increased by twenty-four hours a year without extra pay, and holiday allowances for public sector employees were slashed by 30 percent.
In parliament, the center-left Social Democratic Party supported the pact, whereas the more radical Left Alliance (Vasemmistoliitto) voted against it. The willingness of the trade unions to comply with the government was met with some contempt by those on the Left of Finnish politics, who saw it as a surrender.
This time, the unions would not be so compliant. When the Orpo-Purra government announced its program amidst many scandals, trade unions swiftly mobilized a campaign of their own against the government. This campaign started with protests and walkouts, and gradually escalated toward mass demonstrations and strikes, the largest of which was in the beginning of February, when thirteen thousand demonstrators packed Helsinki’s Senate Square.
The trade unions chose a method of gradual escalation. the fir’t wave of protests included workplace meetings and walkouts. The second phase had one-day strikes and demonstrations. As of March 2023, the protests are in their sixth wave. In between every phase, the unions paused industrial action to give the government an opportunity to negotiate.
Has the scale of the mobilization been impressive? Yes. Still, it is a disappointment to those who remember past protests, such as those against the previous right-wing government and its “competitiveness pact.” In 2015, over thirty thousand protesters showed up to resist the government. Compared to that, this year’s protests look rather timid.
It is worth mentioning that it is not, nor has it been the unions’ intention to topple the legitimately elected government. They simply want the government to negotiate with them about its policies that directly concern the well-being of workers and their families.
The Right’s counterargument is that the people had already had their say in the general election — and that the government can do whatever it pleases, since it has the support of a majority in parliament.
In the past six months, the strikes have caused roughly €1 billion worth of damage to the Finnish economy. This is significant, but not disastrous for a country with an annual GDP of €279 billion. Despite this, Prime Minister Orpo has repeatedly said that the government will not budge and that the labor reforms will be implemented in full. No negotiations have been started with the unions. Government politicians have stressed that the reforms will be driven through parliament regardless of the unions’ industrial action. This means that the current standoff is not only a policy dispute: it is a test on whether trade unions still have enough strength and popular support to influence policy.
Can the Unions Win?
The protests and strikes against the Finnish government’s policies have gone on and off since September, with no end in sight.
There are two ways this can end. Either the government proceeds with its program despite the widespread strikes, or the unions succeed and bring the government to negotiate.
So far, the sympathies of the general Finnish public seem to be on the unions’ side. Last week, pollster Verian reported that 52 percent of Finns approve of the political strikes, with 42 percent disapproving.
The unions can win if the representatives of Finnish big business determine that the costs of the strikes outweigh the potential profits they stand to gain through the government’s new policies. If that happens, one phone call from EK, the largest federation of businesses, would bring Prime Minister Orpo to the negotiating table.
Another path to victory is through a drastic decline of political support for the government. If the working-class voter base of the far-right Finns Party turns on them, it could force the party to seek a compromise. This, however, is unlikely to happen, since 87 percent of Finns Party voters still trust their party of choice, as pollster Taloustutkimus reported last week.
Moreover, the Finns Party has taken a significant shift to the hard right on economic issues. Party chair and finance minister Purra redefined herself as a “fiscal conservative” at the Finns Party conference last year. In a speech to the Finnish parliament, she declared that the “model of the oversized social state has outlived its purpose.” So far, the working-class voter base of the Finns Party does not seem to care.
The unions have yet to unleash one desperate tool at their disposal: a general strike. General strikes are a rarity in Finland. The last one occurred in 1956, and the previous one before that in 1917, a key moment in securing the country’s independence from the Russian Empire.
A general strike could prove disastrous to the national economy. But it may be the only option if the Finnish government maintains its hard line.
Another unpleasant question looms around the corner. What happens if a general strike is called but the government still refuses to compromise? What remains left for the unions to do when the situation cannot be escalated any further? So far, we don’t know what would follow from a defeat — but the dispute is high-stakes already.