Comprehensive Income Policy Agreement

The Comprehensive Income Policy Agreement (Finnish: tulopoliittinen kokonaisratkaisu) is a tri-lateral treaty crafted by the Finnish government together with employees' and employers' trade unions. It is a policy document covering a wide range of economical and political issues, such as salaries, taxation, pensions, unemployment benefits and housing costs.

With the Comprehensive Income Policy Agreement the government and the trade unions try to reach a common understanding of the best choices for the national economy in terms of economic growth and real wages. The basic conundrum is simple: employees want higher salaries, employers want no wage hikes. The government wants to keep national competitiveness and employment rate high but also to ensure sufficient tax revenues.

The Comprehensive Income Policy Agreement is usually agreed on for a two-year period. It is not compulsory: if the employers' and employees' national organisations can't reach an agreement, no comprehensive treaty is signed. In that case, negotiations on salaries are carried out by individual trade federations with no government participation instead of a comprehensive treaty. Sometimes talks are not even initiated due to differences of opinion between trade unions.

The first Comprehensive Income Policy Agreement was negotiated by National Labour Dispute Conciliator Keijo Liinamaa. In 1967 Liinamaa was given a special task by Prime Minister Rafael Paasio : Liinamaa was to negotiate a comprehensive economical deal with employers' organisations and labour unions in order to prevent inflation due to rising wages. These negotiations resulted in the first Comprehensive Income Policy Agreement and brought fame to Liinamaa, a later caretaker Prime Minister.

See also

• Politics of Finland
• Planned economy
• Trade union
• Salary
• Welfare state
• Labour law