Secret negotiations encouraged by the government. To encourage employers to come to the negotiating table, the government offered reducing businesses’ taxes in the event of an agreement. Finance Minister Jyrki Katainen (right wing, national coalition party), eager to support employment and competitiveness, proposed limiting income tax if the social partners could agree on limited wage increases. Employers, mostly represented by the Confederation of Finnish Industries (EK), only accepted the negotiations for fear of seeing a ‘wage race’ begin, since their proposal to limit increases to 0.5% wasn’t heard. Besides, some sectors, notably the forest industry, announced that they would accept no wage increase and therefore wouldn’t apply a general agreement. As for unions, they never agreed with the proposed limit.
on limited wage increases. Employers, mostly represented by the Confederation of Finnish Industries (EK), only accepted the negotiations for fear of seeing a ‘wage race’ begin, since their proposal to limit increases to 0.5% wasn’t heard. Besides, some sectors, notably the forest industry, announced that they would accept no wage increase and therefore wouldn’t apply a general agreement. As for unions, they never agreed with the proposed limit.
Employers’ U-turn. Finding themselves in a rather
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