Fair Pay in Finland
Finland’s head of government is a woman, the five parties in government are led by women, and out of 18 ministers, 11 are women – no Finnish speaker is required to distinguish between ‘he’ and ‘she’, but can use the neutral pronoun ‘hän’, which, in a practical way, includes everyone. But in the Finnish paradise of equality, does everyone have fair pay too?
The Social Democrat Sanna Marin has been prime minister of Finland since 10th December 2019, simultaneously becoming the youngest head of government in the world. When she took office at the age of 34, she was younger than her colleagues Jacinda Ardern, prime minister of New Zealand, and Oleksiy Honcharuk, Ukraine’s prime minister.
And not only that: Marin leads a coalition of five parties, each of which is headed by a woman –four of whom are also under the age of 35. Of Marin’s 18 ministers, 11 are women, and the proportion of women in her parliament is 42 percent – only the Swedish parliament has a greater proportion of women members, at 47 percent.
Increased diversity at the top
Finland’s head of government grew up in a same-sex parented family with two mothers, as a working-class child was the first person in her family to go to university, and is mother to a small daughter. After being elected, the socialist remarked: “I’m very proud that in Finnish politics, age or gender doesn’t matter.”
As a matter of fact, young women are not a new phenomenon in Scandinavian politics, and are certainly no longer a rarity. Finland was the first European country to introduce the women’s right to vote, in 1906, and even before Marin took office, there were women at the top levels of the Finnish government, and the neighbouring Scandinavian countries Iceland (Katrín Jakobsdóttir), Denmark (Mette Frederiksen) and Norway (Erna Solberg) are led by women.
The four Scandinavian countries also lead the way in matters of equality: in the Global Gender Gap Index 2020, Iceland, Norway, Sweden and Finland occupy the top four places. Yet in spite of relatively great economic independence, high levels of participation in the labour market and good education, the Finnish women also earn less than their male colleagues: the Finnish pay gap is 16.7 percent, and is therefore even slightly above the European average of 16 percent.
Equality policy for Europe
In 2019, Finland held the presidency of the EU Council, and in the autumn of 2019 it dedicated a large conference in Helsinki to equality policy. Germany will continue the discussion this year in the same role, under the presidency of Ursula von der Leyen: in the new President of the EU Council’s first 100 days of office, a proposal for transparency measures in the economy is to be worked out.
To date, Finnish legislation has not envisaged any specific laws on transparency in matters of pay. Equal pay is however firmly anchored in the Finnish constitution and in the legislation in many places: since 1995, the Equality Act has provided for binding equality plans in companies with more than 30 employees. The Anti-discrimination Act prohibits discrimination against people on the basis of their age, origins, nationality, language, religion, belief system, opinion, political activity or trade union activity, family relationships, health, disability, sexual orientation or other personal characteristics. And the Employment Contract Act, which stipulates the equal treatment of all employees, includes amongst other things rules for returning from parental leave.
Twelve percent by 2025
Furthermore, from 2016 to 2019 an Equal Pay Programme was implemented; it ended in March 2019, and its continuation is currently being discussed between politicians, and management and labour. For in spite of the very best of political intentions, excellent levels of knowledge and years of educational work, relatively little has been achieved in terms of implementation. According to the critics, more binding measures and more stringent laws are needed. The aim of the Finnish Equal Pay Programme is to reduce the pay gap to 12 percent by 2025. For comparison: Iceland wants to achieve zero percent in the same timeframe.
In recent years, the Finnish women’s national football team has also fought in vain for their pay to be adjusted to that of the men’s premier league – the women demanded that they get the same per match day. So far, their efforts have been unsuccessful: according to the decision of the relevant committees, the pay differences did not contravene the Equality Act.
NOKIA: “The cost of inaction would be far higher”
In contrast to sport, numerous companies in Finland have long since closed the pay gap: for example, the mobile phone giant Nokia – as one of just a few companies – has analysed and adjusted the pay structures of 103,000 employees around the world. This included both men and women, although in 9 out of 10 cases, adjustments affected the salaries of women. In order to ensure that no new instances of unequal treatment arise, in future all salaries will be checked annually.
In order to eliminate discrimination in the future, when setting salaries at Nokia only the job description and job requirements are decisive factors and not previous salaries or employees’ desired salaries.
Nokia’s CEO Rajeev Suri admits that the analysis and equalisation of the gaps found has been expensive. Suri also emphasises, however, how much more it would cost companies if nothing were done: “The cost of inaction would be far higher. It would harm our ability to attract and retain great people and to bring the diverse perspectives needed to ensure the success of our business.”
This example too shows that it is not so much programmes or laws that are needed, but little more than entrepreneurial insight: equality is a business case – and by no means just women’s business. Consequently, in Finland a man holds responsibility for this: the Finnish Minister for Equality is called Thomas Blomqvist.
FPI - What we do
Why does the gender pay gap prove so intractable? What is standing in the way of fair pay for all? What do companies need to do in order to put sustainable pay strategies into practice?
Knowing about the pay gap and being willing to rid the world of the unjust state of affairs are evidently not enough to actually ensure fair pay. It is right here ...