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Finland should not expect a 72 per cent employment rate to be enough to guarantee funding for the welfare state, stress Vesa Vihriälä of the Research Institute of the Finnish Economy and Juho Romakkaniemi of Finland Chamber of Commerce. (Credit: Antti Aimo-Koivisto – Lehtikuva)
Finland should not expect a 72 per cent employment rate to be enough to guarantee funding for the welfare state, stress Vesa Vihriälä of the Research Institute of the Finnish Economy and Juho Romakkaniemi of Finland Chamber of Commerce. (Credit: Antti Aimo-Koivisto – Lehtikuva)

 

The Finnish government should not expect a 72 per cent employment rate to guarantee funding for the welfare state, stress Vesa Vihriälä, the managing director at the Research Institute of the Finnish Economy (Etla), and Juho Romakkaniemi, the chief executive at Finland Chamber of Commerce.

Vihriälä on Friday said the objective should be to raise the employment rate to 75–76 per cent to correspond with the rates in other Nordic countries and Germany.

Romakkaniemi, in turn, argued that the growth pressures imposed on public spending by demographic changes will require that the employment rate is raised to as high as 80 per cent.

“Future governments will otherwise have to trim their budgets considerably, slash benefits and services dramatically, and cut pensions,” he explained in a column published in Savon Sanomat and on the website of Finland Chamber of Commerce.

Vihriälä reminded that the need for further reforms is so substantial that small revisions and adjustments will not be enough.

“We should be talking about a comprehensive social security reform, about allowing employment-based immigration from outside the [European Economic Area] EEA – including especially skilled workers – and about shifting the focus of wage formation to the local level,” he wrote in his column.

He added that although there are various ways to accomplish the final objective, the measures under consideration should include abolishing or at least notably limiting the universally binding nature of collective bargaining agreements.

“It is perfectly clear against this backdrop that modest revisions to the protection against unilateral termination are but the whining of a mosquito in comparison to the reform needs. Trade unions’ resistance to the reform is disproportionate and short-sighted for the same reason. A much more bitter pill must be swallowed to make the necessary changes,” said Vihriälä.

His assessment was echoed by Romakkaniemi.

“Courage will be needed to meet the 80 per cent target for the employment rate: [we need] not only ‘hard’ or ‘soft’ measures but both, in the right proportion,” he stated.

Aleksi Teivainen – HT
Source: Uusi Suomi

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