Small businesses call for flexibility in labour market

The Association of Small Businesses believes that youth employment will be created more easily if the labour laws were relaxed.
Jyrkiäinen thinks Labour Minister Lauri Ihalianen has been a hindrance.

Finland’s rigid system of collective bargaining is called a barrier to youth employment.

“THE current employment model has outlived its usefulness,” says Harri Jyrkiäinen, head of the Association of Small Businesses, Suomen Pienyrittäjät, in an open letter.

He says that thousands of business owners would be willing to hire the youth who are in danger of being marginalised, but heavy sanctions have put them off. It is very expensive for a company to downsize to meet economic conditions, and this means they are much less likely to hire people unless they are absolutely certain they will not have to let them go some day in the future.

“The trade unions and Labour Minister Lauri Ihalainen have made moats instead of building bridges to employment,” Jyrkiäinen continues. “Thousands of business owners work long and hard every day, even at the expense of their own health. A number of business owners would be willing to employ young people, but it is legally impossible.”

He cites Great Britain, which allows small business owners the flexibility to hire and fire employees, and thinks it would work also in Finland.

“We need a new way of thinking and new operating models to create jobs,” Jyrkiäinen says. “Entrepreneurs and small-to-medium sized enterprises employ more than half of working age people.”

Unions disagree

According to the state broadcaster YLE, a variety of union leaders and union-supported politicians have blasted the idea of reform. Eero Vainio from the Social Democratic Party suggested it would cause employees in small businesses to fear losing their jobs. Lauri Lyly, head of the Central Organisation of Finnish Trade Unions SAK suggested that Finland needed even more regulations, instead of loosening the existing ones.

However, the World Economic Forum’s Global Competitiveness Report backs some of Jyrkiäinen’s claims. It ranks Finland as almost the worst country in the world, 137 out of 144, in the flexibility of wage determination. It also ranks Finland appallingly low for its hiring and firing practices, which the organisation believes makes doing business more difficult.

The World Economic Forum’s survey found that restrictive labour regulations were cited by almost one out of five respondents as the most problematic factor for doing business in Finland.



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