Meri Obstbaum

The method by which agreement is reached on wages in the Member States participating in EMU has a particular significance for employment and growth. Optimal wage formation defines the development of competitiveness.

The economy has recovered from the recession following the financial crisis, but growth is expected to remain below its pre-crisis level, averaging 1.5% per annum over 2026–2040.

According to a new structural unemployment indicator based on labour market flows developed by the Bank of Finland, unemployment in Finland is currently close to its structural level.

In both the United States and the euro area, economic growth has picked up and the labour market has strengthened without the build-up of significant wage and price pressures. This raises the question as to how far the economy can still be from its potential output.

Global trends in international trade and technological advances will shape output and employment structures. Accelerating automation raises concerns over a long-term reduction in work, falling wages and increasing inequality.

Finland’s demographic structure and the age structure of the labour force are changing as the baby-boomers retire. Weak employment among the young has been compensated by a higher employment rate among older cohorts.