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EP206 · Economy · first published 2023-08-09

The construction union is after the entrepreneurs | Katariina Komulainen, Tia Kiiskinen | Negotiator 206

Katariina Komulainen, business director at Euro Work, and Tia Kiiskinen, growth director at Yrittäjän Tili ja Laki, join Sami Miettinen in August 2023. The episode is about what happened on Finnish building sites in June 2023, when people working through invoicing services were removed from the sites — and why traditional sole traders went out with them. This write-up sets out the four forms of entrepreneurship, the motive behind the YEL pension reform and the co-operative model, and marks what in the episode is a structural argument and what is an assessment of the other side's intentions. The episode was made in commercial collaboration with Euro Work, and no trade union representative is present.

Sami Miettinen · Sections: AI and the Economy + AI and Society

The construction union is after the entrepreneurs | Katariina Komulainen, Tia Kiiskinen | Negotiator 206

Summary: Katariina Komulainen, business director at Euro Work, and Tia Kiiskinen, growth director at Yrittäjän Tili ja Laki, join Sami Miettinen in August 2023. The episode is about what happened on Finnish building sites in June 2023, when people working through invoicing services were removed from the sites — and why traditional sole traders went out with them. This write-up sets out the four forms of entrepreneurship, the motive behind the YEL pension reform and the co-operative model, and marks what in the episode is a structural argument and what is an assessment of the other side’s intentions. The episode was made in commercial collaboration with Euro Work, and no trade union representative is present.

A note on reading this, and on interests

The recording is from 9 August 2023. The episode takes an open position, and four things are worth reading before the content.

1. What happened on the building sites in June 2023

This is the episode’s factual base and it is worth separating from the interpretations.

The cyclical backdrop. New construction has halved, layoffs have started and unemployment follows quickly. Sites have been suspended outright. Repair construction has held up better. On bankruptcies Komulainen says plainly that this is a situation not seen since the 1990s — and that fewer builders went under in 2008. The guests line up with Petri Roininen from the preceding episode (EP202): two units down, then a shallow recovery.

2. The Ukraine question, and how it should be read

This is the episode’s most sensitive section, and it needs a distinction.

What is conceded. Both guests concede that the system had been misused: light entrepreneurship had been used to avoid employer obligations, pricing was in places clearly below the going rate, and the people doing the work did not always know on what terms. Kiiskinen also raises the case covered in the Yle story of a person who had not understood they were a light entrepreneur. None of this is played down in the episode.

What is claimed. The guests’ main claim is that most cases were not like that. In their account the Ukrainian workers knew they were operating as entrepreneurs, felt they were earning well — the story, according to Kiiskinen, reported them earning better than the collective agreement — and left when the model stopped being profitable.

What the argument is. Komulainen’s question is one of principle and is worth reading as it stands:

What reason would these Ukrainians have to pay pension insurance into Finland? They are returning to Ukraine, they are refugees from a war, they want to work. We want to help them — why do we at the same time want to make doing that work harder?

Miettinen attaches his own parallel: he himself has no interest in accruing a Finnish pension, because his pension accrued in London. The argument is therefore about the tax wedge and free will, not about protection being unnecessary.

What is not in the episode. The other side’s reasoning. The trade union position — that work moving outside the employment relationship weakens conditions across the sector, and that the bargaining position is asymmetric when one party has just arrived in the country and does not speak the language — is not put by anyone in the episode. That is this write-up’s observation, not the episode’s.

What is marked as assessment. The guests say the Construction Trade Union treats an Estonian entrepreneur differently from an Uzbek one, and they describe it as a change over time: by 2023 the Estonian is becoming acceptable, which was not the case before. This is an assessment of another organisation’s attitude based on their experience, not a documented observation. The same applies to the episode’s claim that the unions act this way because “their work is running out otherwise” — that is a prediction about motive, not an observation.

What can be engaged with without speculating about motive is the public statement by SAK’s Saana Siekkinen that people arriving in Finland on a work permit cannot become entrepreneurs. One can disagree with that on the argument, and in the episode they do.

3. The four forms of entrepreneurship

The clearest teaching section in the episode, and it is usable without taking a side in the dispute.

Form Core The guests’ observation
Light entrepreneur (invoicing service) no business ID; invoicing runs through the service Not its own category in labour law. Komulainen compares it to handing over an invoice with a mark on it fifteen years ago.
Sole trader you do the work alone; money, taxes and liabilities run through the person Komulainen says the co-operative gains members whose affairs went so badly as sole traders that they can no longer set up a limited company.
Co-operative the member does the work and agrees the terms; the co-operative handles the administration Euro Work’s model. The core principle of entrepreneurship survives: you agree your own work and manage yourself.
Limited company the entrepreneur as owner Costs and administration are large: accountant, marketing, sales, regulatory filings — and the billable work slips to second place.

Komulainen’s argument for the co-operative is precisely that administrative burden: if you are a damn good carpenter, do that work and agree the terms for it — someone else handles the rest. This is also where the commercial interest is at its most direct (see the note above).

4. Who is an entrepreneur? — the episode’s analytical high point

Kiiskinen’s section on the definition of entrepreneurship is the strongest content in the episode, because it requires taking nobody’s side.

The lay assumption is that an entrepreneur is someone with a business ID who invoices for their work. It is not so:

And then an example that shows how slippery the line is: a sole trader in haulage sells their service and takes goods from A to B as they see fit. If the contract is changed so that the work is done at the same time every week or with the client’s equipment, the definition of entrepreneurship no longer holds and the person risks suddenly being an employee. Miettinen adds the number of clients: an entrepreneur with one client is easier to read as a disguised employment relationship.

From which follows the sharpest question in the episode, and Kiiskinen asks it:

If we really apply that stamp — that you have too few clients and take instructions from them — how many of Finland’s solo entrepreneurs would meet the definition of entrepreneurship?

The answer in the episode is “we would have no entrepreneurs”, and a figure is attached to it: 93 per cent of Finland’s entrepreneurs are micro entrepreneurs.

5. YEL — motive, mechanism and an alternative

The episode’s second hard section, and it is structurally clear.

The motive. Kiiskinen states it bluntly: the government’s motive for changing YEL is not to improve entrepreneurs’ security but that the YEL fund is empty — the figure given in the episode is about 400 million euros a year in deficit, because the system has never been funded. From which follows the question of where the money comes from, and her answer is: the entrepreneur’s pocket. This is an interpretation of motive, not the official rationale.

The mechanism. A rise in the YEL income base is demanded so that it corresponds to the actual work input: if you work 60 hours a week, the income base should correspond to the pay you would earn for it. Kiiskinen says this does not in practice happen that way, but the principle has been stated.

Who it hits. Large companies do not suffer from this; micro entrepreneurs do. And attached to that is the episode’s most precise single claim, which is also the easiest to check:

Even if you double the minimum YEL, it still does not show up anywhere — you get only the minimum pension all the same. You have to raise the contribution a great deal before it makes any difference.

The alternative calculation. The comparison put in the episode is rough but illustrative: a thousand a month for 40 years at a five per cent return produces, according to Kiiskinen, a good pension and something left over for the next generation. In YEL the same money is not inheritable. This is a calculation on a return assumption and not a comparison against YEL’s insurance-type benefits — YEL also covers incapacity and survivors’ pensions, which the episode does not address.

An alternative model. Miettinen’s proposal is based on his own experience in Britain: the employer pays part and the employee pays part without a tax wedge, the fund compounds, and taxation happens at the point of withdrawal. His version of how it would fit Finland is a voluntary transition: the old YEL stays for those who find it works, with a locked-in pension savings vehicle alongside it.

Criticism of the lobby. Kiiskinen says she is disappointed in Suomen Yrittäjät, the entrepreneurs’ federation, for having helped create the package. She agrees the system needs reform — but not like this; it should be torn down and rebuilt. As an aside it is noted that Mikro- ja yksinyrittäjät ry was born out of disagreement on exactly this point.

6. The co-operative seen through left-wing eyes — the best exchange in the episode

Miettinen puts a question that turns the whole conversation around, and it is worth reading whole: if, in Marxist terms, the surplus value of labour belongs entirely to the worker and the owner of capital extracts it — is there not then something in the co-operative model that the left should like too?

Komulainen’s reaction is the most honest moment in the episode:

Odd question. Now that you have put it that way — yes — and I have never thought about this like that, because a right-leaning outlook pushes you to think otherwise.

And then an analysis that holds up: co-operative activity is member-driven, a co-operative’s purpose is not to produce millions for its owners, and in Finland the co-operative has historically been a tool of the left rather than the right. What is new is that in this case the members are all entrepreneurs selling their own skills.

This section is the episode’s best precisely because it is the only place where a guest changes their view mid-conversation.

7. A worked example: a facade repair

The episode does something rare: it runs the model through one real transaction. Miettinen is a shareholder in a housing company on Kalevankatu, and the building had just had a facade repair. How would the same job have gone if bought from a co-operative entrepreneur?

  1. The worker comes on site and agrees the work and the price directly with the client — the example in the episode is rendering, on the order of 6,000 euros plus VAT depending on the wall.
  2. A written contract is made; the co-operative and the member are both aware of it, because the ownership principle sits behind it.
  3. The invoice comes from the co-operative, not from the worker personally.
  4. If payment does not arrive, the co-operative may have a debt collection service and other support — plus practical help when, for example, the worker does not speak Finnish and scaffolding use has to be agreed with the site.

This is also where the model’s added value over a bare sole tradership is most concretely visible: contract risk and collection move to the co-operative.

8. Does Finland hate entrepreneurs

The closing part is about attitudes, and it works on two levels.

Education and culture. Both guests describe a generational experience in which school steered people towards wage work: the careers adviser suggested teaching, no help was available for entrepreneurship, and personal finance was not taught. Miettinen recounts once proposing to Jyrki Katainen that every Finn should automatically be issued a business ID; he concedes it goes “too far”, but Komulainen picks it up: light entrepreneurship was in practice exactly that — the personal identity number working as a business ID.

Scaremongering in both directions. Kiiskinen’s observation is symmetrical and is the best part of this section: people are frightened about entrepreneurship as much in one direction (you will have to invoice this much or you are bankrupt) as away from it. There are bogeymen on both sides.

The question left open. Komulainen’s answer to the title question is that the country is not full of hatred for entrepreneurs but of “the wrong kind of entrepreneur” — and that nobody has a clear picture of what the right kind is. She puts it pointedly: you are allowed to get rich on the lottery and you are allowed to get rich in sport, but not as an entrepreneur.

9. A recession is an opportunity — the only optimistic section

The final part is deliberately hopeful, and it is framed without a doomsday scenario.

Claims presented as claims

What stays with you

  1. Removing light entrepreneurs from the sites took sole traders down with them, because on site nobody can draw the line. This is the episode’s most concrete claim and it is checkable.
  2. The definition of entrepreneurship is not settled by a business ID. The same person can be a different thing in the eyes of different systems, and the line is drawn case by case.
  3. Doubling the minimum YEL does not show up in the pension. If that holds, it is the single most important number in the reform debate.
  4. The co-operative is an ideologically two-handed model — and the episode’s best moment is the one where a guest concedes it mid-sentence.

How the episode runs

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