Draghi gets help from northerners’ pay demand

Bloomberg

If Mario Draghi, the president of the European Central Bank, is looking for signs of wage growth, he might find comfort in Finland.
After delivering the euro zone’s fastest pace of economic growth in the first quarter, Finnish workers have had enough belt-tightening and are now demanding pay rises they say are only fair given the rebound in exports.
Finns have put in longer hours and given up bank holidays in response to government demands. Their efforts helped drag the Nordic region’s only euro member out of a three-year recession. Now, a sense of entitlement is spreading, setting the stage for what are likely to be the toughest wage
negotiations the country has seen
in years.
Finnish industry is improving and exports are growing again, said Petri Vanhala, chairman of the Finnish Paper Workers’ Union, which represents 36,400 workers. That means there should be “something falling into to the pocket of the worker,” he said in an interview in Helsinki.
A report on Monday showed Finnish inflation slowed to 0.5 percent in July from 0.7 percent in the month before, way below the euro area’s overall 1.3 percent rate.
Vanhala and other union representatives have timed their fight carefully. Export growth has outpaced most forecasts and the biggest Finnish industrial companies are now more profitable. Meanwhile, wages over the past half decade have increased just 6 percent.
Businesses should be able to afford paying average workers more, Vanhala said. The unions are only making reasonable demands, he said, and will “not go crazy.” The country is still
behind its main export rivals in terms of competitiveness.