Finnish incomes policy, political exchange and social capital

Other Publications, Reports 13 Jaakko Kiander, Pekka Sauramo, Hannu Tanninen

Finnish incomes policy has, over nearly 40 years, generally produced moderate pay increases, in return for which wage earners have been able to benefit from a broad welfare state, shorter working hours, and an even distribution of income. The system has been based on trust between its parties. The end of incomes policy therefore does not merely signify the abandonment of centralised wage agreements, but may also lead to an erosion of trust between the parties and, as a consequence, to a broader transformation of the framework of economic and social policy than has hitherto been believed. (AI translation)

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