Wages and unit labour costs have increased about 10% since 1999 compared to the average of all trading partners and compared to euro area. BIS central bankers’ speeches  1  How did cost competitiveness end up weakening so much? One part is misjudgment and bad luck regarding timing. Just before the global financial crises escalated, a round of union-level wage agreements took place.
Amid rapid growth and with seemingly benign outlook, generous wage increases were agreed upon, and the contracts mostly extended for about two years. Then the financial crisis struck, leading to slowdown in wages in many countries while Finnish wages diverged. Why was no correction made after the contracts had expired?