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Strikes Hobble Finland as Labor Market Unrest Bubbles to Surface

Strikes Hobble Finland as Labor Market Unrest Bubbles to Surface

(Bloomberg) -- Sympathy strikes have grounded flights and brought havoc to commuters in Finland, as workers’ disgruntlement after years of belt-tightening comes to a head.

Collective agreements are expiring in several industries and some trade unions are demanding pay rises after agreeing to a fiercely unpopular reform designed to boost productivity in the euro region’s northernmost economy.

“The situation in the labor market is feverish,” said Aki Kangasharju, director of the Research Institute of the Finnish Economy (ETLA), which is funded by employer organizations.

“We’ve been through a tough decade and we’ve had to push through various reforms to get the economy going. Now that growth has resumed, the backlash is starting. Employees want compensation after years of cutbacks,” Kangasharju said.

The latest wave of industrial action started on Nov. 11, when postal workers went on strike to protest against planned pay cuts of as much as 42% impacting about 700 staff. At the heart of the matter is a shift in the industry, away from the delivery of letters and toward the more expensive shipment of parcels.

Failed Mediation

Monday’s support action for the postal workers followed failed attempts at mediation and resulted in about 70% of Finnair Oyj’s flights being grounded, with the national carrier saying about 20,000 customers would be affected. Buses were grounded in Helsinki, stranding thousands of morning commuters, while some international ferry services also halted operations.

The industrial action at Finland’s ports is set to escalate further toward the end of the week, when stevedores plan to stop working for two days. Separately, almost 100,000 industry workers, including white-collar staff, plan to go on strike on Dec. 9. in protest at the 2016 competitiveness pact.

Ilkka Kaukoranta, chief economist at the Central Organisation of Finnish Trade Unions (SAK), said employers’ concerns about the industrial action are overblown.

“The current strikes won’t have a crucial impact on the Finnish economy,” he said by phone.

Finland’s economy is slowing, partly as a result of global trade tensions, with the OECD now expecting the growth rate to fall below 1% in 2021.

To contact the reporters on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net;Leo Laikola in Helsinki at llaikola@bloomberg.net

To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net, Nick Rigillo

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