Picture: Tony Öhberg for Finland Today
The situation at state-owned Posti, where CEO Heikki Malinen has been receiving an annual salary of almost a million euros amid steady lay-offs and considerable pay-cuts to postal workers, has become the latest political controversy in Finland. While the government has promised to look into the matter and introduce changes to executive salaries, the matter also raises the issue of whether Posti would work better as a public or private company.
I propose, first, that excessive executive pay and downsizing in the labor force are actually two separate issues, although they are inevitably presented in as controversial a juxtaposition as possible in order to feed public outrage; and second, that in this confrontation between leadership and workers, which will ultimately have to be resolved by the company’s owner—, for example, the state, the latter will likely be too busy to even consider the interests of Posti’s consumer base—who are, ironically, the Finnish people.
The insight, in other words, that is sure to elude everyone in all this is that Posti runs a terrible business. What follows is some anecdotal evidence of a disgruntled, though not entirely unamused,
Last week on Thursday I received a text message from Posti, informing me that a package I had been expecting from abroad has arrived
On my way there I marveled at the wonders of modern technology that enable the carrier to deliver mail with only minimal human interaction involved. But upon arrival to my nearest post-locker-room, now sans employees, the amazement quickly gave way to my usual stoic resignation.
It turned out that the keyboard on my locker only contained numbers, while my code also included letters. I called customer support and waited for 15 minutes before I got through. In this time, three other customers attempted to pick up their packages, which I will now take to be a representative-enough sample of Posti customers. Like me, they all tried to open their lockers and failed. This indicated we shared the same problem and we struck up a delightful conversation while I waited to get through to customer support.
“Modern technology is really great,” quipped a bearded man in his thirties, echoing my initial sentiments with more ironic overtones.
“Really makes life easier, doesn’t it?” I said.
When I finally got through, the man on the line explained to me this was a wider issue they were experiencing and told me I will receive a new code when the issue was resolved. For now, though, I was free to go home.
I received a functioning code on Monday afternoon of the following week, having spent a weekend wondering how the problem could possibly arise: why would you send out lettered codes if you don’t have letters on your locker keyboards? It also didn’t escape my ken that this would probably not have occurred if there were human employees present to hand over the package. In any case, I finally picked up my mail on Tuesday, September 10, while the projected delivery date from the private mail carrier that delivered it to Finland from abroad was Tuesday, September 3.
I, as a customer, don’t recall demanding the introduction of locker rooms rather than having a kind human hand the package over, but I can see them being more cost-effective.
In a press release on August 29, Posti announced changes in its parcel sorting operations, saying “flexible employment terms” will be introduced but no personnel reductions will be made. As reasons for this move, Posti cited changing consumer behavior and keeping up with
Indeed. But it would appear lowering workers’ wages and technological innovation has brought little of the above, most certainly not speed. Presumably, stratospheric executive bonuses didn’t help either.
It seems clear, however, that Posti has been and will continue to be forced to replace part of its labor force with digital solutions and AI technology in order to remain competitive. In this respect, workers will likely be put in a precarious position regardless of the excesses of their CEO’s salary. I, as a customer, don’t recall demanding the introduction of locker rooms rather than having a kind human hand the package over, but I can see them being more cost-effective.
At the same time, if Posti is so concerned about competitiveness, the CEO would probably not have increased his annual salary by 65 percent in the past four years. So while layoffs may be a sad reality of the sector in the twenty-first century, the wage disparity at the company appears to be an example of poor government ownership and management.
It tends to be the case that when the owner is spending somebody else’s bottomless pit of money—in this case, the very taxpayers who end up being the end-users of Posti services—they are usually not spending it as prudently as someone with limited resources and a personal stake in the profits of their company.
On the other hand, the workers have a better bargaining position in the case of state ownership. A private Posti would not have been under the same kind of moral and practical responsibility to look after the workers’ interests; moral because the workers are also citizens (or residents) and the state is obliged to look after them, and practical because the state has to maintain unemployment numbers as low as possible.
But as public debate centers on the appropriate sanctions against excessive executive salaries, as well as the risks and benefits of privatization and state ownership, the problem with Posti that nobody is talking about is that I received my shipment a week late. And my fear is that neither of the measures currently discussed will change that misfortune.