This week the biggest labour federation, SAK, said it's aiming for ten percent wage hikes for the next contract period, arguing wage-earners' purchasing power is in a slump.
Inflation has been chipping away at people's purchasing power in Finland since peaking in 2021. In other words, inflation has cost the average earner the equivalent of about two months' salary.
This is because wage increases have not kept pace with rising prices.
The lowest point for Finnish wage earners was in 2023, when purchasing power dropped to its lowest level in 15 years. This means money in Finland bought less food, electricity and clothing than it has in the past decade and a half.
Purchasing power is, however, on the rise again. It has been steadily improving since the beginning of 2023, driven by a slowdown in inflation and a decline in interest rates.
"With inflation in Finland currently at one percent, it allows wage increases to improve real incomes and, in turn, the standard of living," said Hannu Nummiaro, an economist at Lähi-Tapiola.
But people are still getting less for their money compared to a few years ago. Nummiaro explained that, using 2021 as a reference point, the decline in living standards caused by inflation is so substantial that the ongoing recovery is only nearing the halfway point.
He has calculated that with an average Finnish monthly salary of 3,700 euros, one can now afford about 160 euros less in goods and services compared to 2021. This comes out to a 7,000-euro dent over three years.
According to Nummiaro, a similar loss in purchasing power was last experienced during the 1970s oil crisis.
"This is something of a generational experience," Nummiaro added.
While the majority of households have managed to cope with inflation reasonably well, around 15 percent have had to go into debt or dip into their savings.
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