Finland’s local governments may have to grapple with an additional eight billion euros in personnel costs, if social and health care professionals receive pay increases beyond the general level that they are demanding, KT, the association of local government employers said on Tuesday.
The additional costs that KT outlined would accrue over a period of 10 years, and would reflect expenses of nearly 800 million euros annually.
Currently municipalities spend roughly 7.6 billion euros a year on labour costs in the social and health care sector. According to calculations by the employers’ organisation, in 10 years, labour costs will be nearly 20 percent or 1.5 billion euros more than today, reaching a total of just over nine billion euros.
"Public finances stressed"
The organisation said that public and municipal finances are stressed and in deficit.
"It is imperative to maintain labour marker contracts at a moderate level to improve employment, competitiveness and the state of public finances. Municipal employers do not have extra to allocate," KT labour market director Markku Jalonen said in a statement.
Employers in the sector speculated that if workers’ demand for pay increases were implemented across all municipalities then total costs would approach 22 billion euros in 10 years.
"This way, increased costs implemented across the entire municipal sector would at worst drive up municipal taxes by 2.2 percentage points in 10 years," KT research manager Mika Juutinen warned.
Unions warn of impending care crisis
Super and Tehy, two unions representing workers in the social and health care sector, have called for government to reserve budget allocations for wage programmes in female-dominated fields.
The annual net cost of the wage programme to municipalities will be around 80 million euros over 10 years. The figure includes government subventions to local government, of which 80 million euros is less than one percent. The programme requires buy-in from central government, since municipal employers have no funds for it.
The unions argued that a guaranteed wage programme would reduce employee turnover in the field and would ease the threat of a care professional shortage. They also pointed out that nurses are retiring or leaving the profession at the same time that an ageing population needs them more than ever.
"Prime Minister Antti Rinne has said that he understands the wage demands of female-dominated sectors. We also need to ask whether or not we can afford not to raise care professionals’ pay, rather than whether or not we can afford to raise them," Super chair Silja Paavola said in a statement.
