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There are currently 149,000 people in disguised unemployment, up 28 per cent from last year.The official unemployment rate is 7.4%, but including all those who fall outside statistics would push the rate up to 19.1%.

"There are three kinds of lies: lies, damned lies, and statistics." This quote, attributed to the 19th Century British Prime Minister Benjamin Disraeli, warns of the dangers of using statistics to prove a point. Disraeli's admonition may be especially relevant when it comes to Finland's unemployment rate.

Markus Lahtinen, research director of the Pellervo Economic Research Institute, warned the national broadcaster YLE that Finland had many people seeking work who did not fall under the official statistics.

"It's a serious problem because otherwise those people wouldn't be 'hidden unemployed' but unemployed jobseekers and the unemployment rate would be around 12 per cent," YLE quoted Lahtinen as saying. "That's in a totally different class from the 7.4 per cent reported by Statistics Finland."

Disguised unemployment

Officially, a person has to meet three criteria to be classified as unemployed. He must neither be an employee or self-employed. He must have actively sought employment in the past four weeks. Finally, he must be available to work within two weeks. If any of these are not met then the person is not considered unemployed.

Finland’s
unemployment rates
Official unemployment
rate:
7.4%

+ those not seeking work:
12.3%

+ those not available
to immediately start work:
15.9%

+ those underemployed:
19.1%

A large category of people who are not caught in official statistics are those who are not actively seeking employment. Statistics Finland terms this as disguised unemployment, and claims the labour market is so weak that people aren't encouraged to try and find jobs. Although despair at finding a job might be the main reason for people to give up their job search, Statistics Finland also cites studies, caring for children and ill health.

There are currently 149,000 people in disguised unemployment, up 28 per cent from last year. This is a remarkably high number, as the total number of officially unemployed persons is 197,000. Adding these to the official figures would push Finland's unemployment rate up to 12.3 per cent, just as PTT's Lahtinen claimed.

According to Eurostat some 5.1 per cent of the Finnish workforce is in this category of unemployed but not searching for a job. The average rate in the Euro area is 4.4 per cent. Additionally, this disguised unemployment rate is growing faster in Finland than in any other Euro country besides Italy.

...

DAVID J. CORD
HELSINKI TIMES
LEHTIKUVA / Roni Rekomaa

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