Labour flexibility helped Finland pull out of deep recession in early 1990s

(Helsinki 06.09.2002 Juhani Artto) Since the 1980s the favoured mantra of employers in Finland, as in many other countries, has been flexibility. Employer representatives have criticised labour and the trade unions for defending "overly rigid" working hours, pay scales, social security norms and other "inflexibilities" in collective agreements and legislation. This, they say, undermines the international competitiveness of enterprises based in Finland.

A new study prepared by several reputable researchers has now refuted the main contention of this approach. The authors claim that labour flexibility was one of the key factors - if not the principal factor - that turned the deep recession of the early 1990s into a sustained period of rapid economic growth.

"We may even speak of excessive flexibility," is the comment of Kirsti Palanko-Laaka, who leads the work environment department at Finland's largest trade union confederation SAK. "The increased flexibility has been managed well in part, when based on local agreements, but also poorly. Nowadays manpower usage often resembles the Wild West."

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