The lost dynamics of the labour market?

The article examines Finland’s collectively agreed wage development and its connection to employment from the 2008 financial crisis to the present day.

Following the financial crisis and the collapse of Nokia, negotiated wage increases declined steadily as employment deteriorated. The competitiveness agreement of 2016 moderated increases further — even to an exceptional degree relative to the employment situation. In the 2020s, private sector employment is at a historically high level, but wage development has remained sufficiently moderate to preserve company profitability.

In 2024, a crossroads has been reached: in the pessimistic scenario, a climate of conflict and excessively rising negotiated increases weaken employment back to the levels of the early 2010s; in the positive scenario, the moderate line continues and the corporate sector’s competitiveness is maintained. (AI translation)

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