The Finnish Government has unveiled a list of new measures to tear down inactivity traps in order to meet its target of raising the national employment rate to 72 per cent.
The Government revealed that the measures agreed upon in its two-day mid-term session are expected to raise the number of the employed by 5,000, according to calculations made by the Ministry of Finance.
The employment rate for the 15–64-year-old population improved by 0.6 percentage points from the previous year to 68.7 per cent in 2016, according to data released by Statistics Finland. The improvement was attributable largely to the almost 1.5-percentage point increase – from 68.5 to 69.8 per cent – in the male employment rate. The employment rate for women, on the other hand, remained largely unchanged, at 67.6 per cent.
The Government announced yesterday that it will slash early-childhood education fees for low and middle-income families and remove the fees altogether for roughly 6,700 families. The impact of the reduction on municipal finances – an estimated 69 million euros – will be offset by adjusting the state subsidies for basic services, the share of municipalities of tax revenues and the lower limit for property tax rates.
The costs arising from the housing allowance system, in turn, will be pared down by introducing a square metre-based cut-off point for the allowances and by tying the allowances to the cost of living index instead of the rental housing index.
The Government will also seek to promote geographical labour mobility by relaxing the eligibility conditions for commuting and relocation allowances.
€45m for preventing youth marginalisation
The Government revealed it is planning on streamlining the system for promoting the well-being, educational attainment and employment of children and young people, acknowledging that the current system has failed to sufficiently encourage children and young people to discover their own strengths and pathways to employment.
The 19 measures identified to accomplish this will require approximately 45 million euros in additional funding.
The Government is prepared to overhaul the personnel structure of early-childhood education in an attempt to improve the quality of early-childhood education and increase the availability of multi-professional support for children and families.
Fifteen-million euros will be invest in developing special education and reducing class sizes at primary schools located in challenging regions.
An additional 30 million euros, meanwhile, will be set aside for implementing the reform of vocational education in 2018–2019. The objective is thus to promote the digitisation of vocational education, reduce the number of drop-outs and create new pathways to further education and employment in collaboration with employers.
Inactive job seekers to see unemployment benefits drop after three months
The Government also announced a number of changes to the unemployment security system designed to encourage job seekers to actively look for employment opportunities and participate in employment services.
It proposes that the initial waiting period for unemployment benefits be reduced from seven to five days. The benefits, however, would be cut by 4.65 per cent – by introducing a monthly one-day waiting period – for job seekers who have either failed to find employment or neglected to participate in employment services for three months.
The Government also revealed that it will establish general principles for zero-hour employment contracts and take action to increase the efficiency of wage subsidies.
The wage subsidy system, it stated, will be rationalised by consolidating the employment vouchers granted to young and over 30-year-old job seekers in order to ensure employers are aware of the applicant’s eligibility for wage subsidies already in the job interview.
The measures to promote entrepreneurship, in turn, will include improving the unemployment security of the self-employed and reducing the waiting period of the self-employed for sickness allowances from four days to one day. The possibility of allowing the unemployed to self-employ themselves while receiving unemployment benefits for up to four months will also be explored.
Employment services will be funded with an additional 25 million euros.
UPDATE: The Government has revised its estimate of the impact of cutting early-childhood education fees on municipal finances, lowering it from 90 to 69 million euros.
Aleksi Teivainen – HT
Photo: Roni Lehti – Lehtikuva