Pellervo Economic Research Institute (PTT) has offered a sobering assessment of the long-term unemployment situation in Finland.
PTT on Thursday called attention to the rather modest, eight-per-cent decrease in the number of labour subsidy recipients – which, according to it, is a relatively accurate measurement of long-term unemployment – between July 2017 and July 2018.
“There is a rather pronounced difference between the change in the number of people classified as long-term unemployed and that in the number of labour market subsidy recipients. While there were 29,000 fewer long-term unemployed than in the previous year in July 2018, there were only 8,650 fewer labour market subsidy recipients,” it stated.
PTT estimated that it is apparent that the increased frequency of job seeker interviews has produced more accurate data on the unemployment situation and cleaned the statistics of people who are not unemployed job seekers. It is therefore likely, it said, that the improvement in the long-term unemployment situation is attributable to a statistical clean-up.
“The number of unemployment benefit recipients may currently be roughly equivalent to the number of unemployed job seekers, but before the start of 2017 there were almost 30,000 more unemployed job seekers,” it highlighted.
The less pronounced decrease in the number of labour market subsidy recipients seems to be evidence of the difficulty of thawing the “hard core of unemployment,” according to PTT.
It also acknowledged that the employment situation has improved at a mind-boggling pace since the end of last year. The improvements, however, are reflected primarily in the number of basic and earnings-related allowance recipients, which fell by 16 per cent between July 2017 and July 2018.
“In July, the ranks of the employed were roughly 75,000 larger than one year earlier, signalling a year-on-year increase of 2.9 per cent. On average, the growth has been rapid throughout the first half of this year. We have not seen growth as robust as this since the late 1990s, when it was driven by Nokia,” stated PTT.
PTT on Thursday also announced it expects the national economy to expand by 2.6 per cent in 2018 and by 2.4 per cent in 2019.
“The upswing is continuing rather nicely, but it has been driven mainly by the same old factors: investments have focused on construction, productivity growth has been lacklustre and the labour markets are in need of reforms,” said Janne Huovari, the head of forecasting at PTT.
“The current investment structure makes it challenging to improve labour productivity and raises concerns about value generation already in the near future,” he added.
Aleksi Teivainen – HT
Source: Uusi Suomi