Sixty euro pay rise coming for the average Finnish family

The Central Organisation of Finnish Trade Unions (SAK) has reckoned the impact of these pay increases on a family earning the average income for members of its affiliated trade unions, and has found that the monthly earnings of this average family will increase by 61 euros over the next two years.

Sari currently earns a monthly salary of €2,490 for her work as a home care assistant. Her monthly salary under the collective agreement for local government employees would increase by €20 in July 2014 and then by 0.4 per cent a year later, reaching €2,520 as of July 2015. The timing of these increases will depend on the collective agreement.

Tommi’s work as a machinist is covered by the collective agreement for the technology industries. His monthly earnings would increase from €2,852 to €2,872 as of next March, and then to €2,883 a year later.

The family’s total monthly earnings would increase from approximately €5,340 to more than €5,400 over a period of just under two years.

Third phase increases to be settled in summer 2015

The date of pay increases under the pact for employment and growth will depend on the expiry dates of various collective agreements, and the increases will only occur if the trade unions and employer federations in various industries are able to reach a corresponding accord in their own collective bargaining by no later than 25 October.

The first pay increase will be a standard rise of 20 euros per month, whereas the second increase will be a proportional rise of 0.4 per cent. The third year of the pact for employment and growth is conditional, meaning that the pact may be terminated after two years if no settlement is reached on pay increases for the third year. Negotiation on these increases must be completed by the middle of June 2015.

The pay rises that have already been agreed are very moderate, and employee purchasing power will also be boosted by a government promise of tax relief. Despite this combined effect, the net incomes of employees are not expected to keep pace with inflation, meaning an overall deterioration in purchasing power.

It is estimated that these moderate pay increases will help to create some 40 to 50 thousand new jobs during the first two years of the pact. Including this impact on employment, the combined purchasing power of Finland is thereby forecast to increase by a total of 1.1 per cent.

Pact for Employment and Growth