Finnish wage level in EU comparison

Abstract

The main objective of the study is to compare the wage level of Finnish employees from several perspectives with the wages of employees working in other EU countries. The data source is the EU Statistics on Income and Living Conditions (EU-SILC). Most comparisons concern full-time employees, and the most recent data are from 2011.

Among current EU member states, the average wage level of full-time employees in Finland – €3,132 per month in 2011 – is above the EU average. Wage levels are higher than in Finland, for example, in Denmark and the Netherlands. In Sweden, wages are also slightly higher than in Finland, although the difference is very small. In Germany, wages are somewhat lower than in Finland. When differences in price levels are taken into account, the ranking between Finland and Sweden, as well as between Finland and Germany, changes.

In Finland, wage dispersion is the fourth lowest among the comparison countries. It is lowest in Denmark. The Baltic countries and Germany are characterized by large wage gaps between high and low earners. These countries share a relatively decentralized wage-setting system. In contrast, countries with low wage dispersion, such as the Nordic countries, tend to have coordinated wage bargaining systems.

Finland has a relatively low incidence of low-wage employment. Defining low-wage work as earning less than two-thirds of the median wage, the threshold in Finland is about €1,900. In 2011, around 15 percent of full-time employees fell below this threshold. In Germany, for example, the share of low-wage workers was significantly higher, at 23 percent.

In terms of the gender wage gap, Finland falls in the middle of the comparison countries when measured in relative terms. The female-to-male wage ratio ranges from about 70 to 90 percent. In Finland, it was 84 percent in 2011.

In Finland, wages for highly educated workers are relatively low, while wages for less educated workers are relatively high. Sweden, for example, is a country where the wages of less educated workers are higher than in Finland.

Wages do not necessarily increase with age. In the United Kingdom, Denmark, and Germany, middle-aged workers are the highest earners. In Finland and Norway, the oldest age group earns only slightly more than middle-aged workers. In Estonia, young workers earn more than those over 54 years of age.

A distinctive feature of the crisis years has been that nominal wages have fallen in some countries. The decline has been most pronounced in Greece, but average wage levels have also fallen in Spain, Portugal, and Ireland. (AI translation)

• ISSN: 1795-2832 (Print), 2242-6914 (Online)
• ISBN: 978-952-209-132-1 (Print), 978-952-209-133-8 (Online)
• Press Release in Finnish
• Publication in PDF-format