Kirsi Ahola enjoys her job at a second-hand shop in Simonkylä, Vantaa, despite not earning enough to cover her essential expenses.More and more people have to rely on social assistance in the capital region despite being in employment as their wages are not enough to cover their essential expenses.

One of these people is Kirsi Ahola from Vantaa. Ahola is currently in wage-subsidised employment at a second-hand shop in Simonkylä, Vantaa, operated by the local organisation of the unemployed. She presumed after receiving the job that she would no longer need additional benefits but was proven wrong.

“I have no other choice because the rents are so high. I have to secure a minimum income somehow. I simply wouldn't get by without benefits,” she says.

Soaring rents are indeed largely to blame for the increase in the number of social assistance recipients as roughly half of the benefits have been granted for housing costs, reveals Pasi Moisio, a research professor at the National Institute for Health and Welfare (THL). In recent years, rents have risen considerably more than wages and social benefits.

The number of households receiving social assistance in Helsinki has increased from roughly 42,000 in 2010 to over 48,000 in 2014. The number of households at least partly dependent on social assistance has similarly crept up in Espoo and Vantaa since 2010. Meanwhile, the relative share of recipients who are in employment has also grown: from 7.8 to 8.9 per cent in Helsinki and from 5.6 to 7.8 per cent in Espoo between November 2010 and November 2014.

The share is believed to have crept up also in Vantaa. Specific data, however, is only available from November 2013 when 11.1 per cent of social assistance recipients were in employment.

Nationwide statistics indicate that approximately half of social assistance recipients in employment receive social assistance for a duration of over nine months.

“The duration has continued to grow. Social assistance has become a permanent form [of income security] for regrettably many, also to people with earned income,” laments Tapio Nieminen, a district manager at the department for social and health services of Espoo.

Moisio is somewhat puzzled by the increase in the relative share of social assistance recipients in employment as changes introduced to the benefit system should have reduced the reliance of employees on social assistance. In particular, the 300 euro earnings exemption introduced for recipients of adjusted unemployment benefits early last year should have had an effect.

“Low-income households of earners are left with more of their unemployment benefits even if their wages have stayed exactly the same. There shouldn't be as much need for social assistance due to the changes made to the system,” he says.

In addition to soaring rents, changes in the labour markets have contributed to the phenomenon. Zero-hour and part-time contracts are believed to have become more common, which may partly explain the reliance of people in employment on what is generally regarded as a last-resort form of income security.

“Social assistance statistics surely also reflect changes in the working life. When you work short-term gigs, as a hired hand or just have irregular income, you lack continuity. Planning your life is really difficult when compared to people who earn roughly the same amount of money every month,” says Nieminen.

If it drags on, the situation will benefit no one.

“A sufficient wage is what characterises a proper job. It must be enough to get by. Part-time employees, for example, should be allowed to work more hours,” says Merja Kauhanen, the acting research director at the Labour Institute for Economic Research.

Employment nevertheless offers relatively reliable protection against poverty in Finland. Statistics Finland has estimated that on an average fewer than 2.4 per cent of wage earners fall into the low-income bracket.

The type of employment relationship, however, is of significance: the risk of poverty is more imminent for employees on fixed-term or part-time contracts as well as for the self-employed. At present, 17.4 per cent of the self-employed fall into the low-income bracket while the corresponding percentage among the jobless is 45.7 per cent.

People are deemed to be at risk of poverty if they live in a household with disposable income, including any possible transfer payments, below 60 per cent of the national median income. In 2013, the threshold stood at 14,260 euros per year or 1,190 euros per month for one-person households.

Kauhanen estimates that the continuing debate raising the employment rate has been simplified excessively. The rate, she says, must certainly be raised, but also the quality of employment must be taken into consideration.

“We not only need more jobs, but also better jobs, jobs that help you get by,” she stresses.

The unemployed hardly form a uniform group. While employment does offer protection against poverty for most, it does not do so for all. “Low-paid jobs increase the risk of poverty, but far from all low-paid employees are classified as poor employees,” points out Kauhanen.

In Germany, for example, low-paid employment has increased sharply after the implementation of the so-called Hartz reforms. “Poverty among the employed has grown notably in Germany, and many have to constantly collect social benefits,” Kauhanen says.

She also points out that studies carried out in the country indicate that the so-called mini-jobs are rarely a gateway to better-paying jobs. “This is a model that's hardly worth duplicating,” she concludes.

Ahola has enjoyed her six-hours-a-day job at the second-hand shop in Simonkylä due to the regular daily schedule it offers, despite having to get by on low income and having to draw up benefit applications on a monthly basis. Her situation is nevertheless far from ideal as she cannot cover her essential expenses without assistance.

“This is wonderful for my mental well-being and I'm glad for such an opportunity, but why is the jungle of benefits so difficult,” she says.

Ahola would get by just as well financially by collecting unemployment and housing benefits in addition to social assistance. Two years of unemployment was enough for her, however. Prior to that, she worked at the Finnish Institute of Occupational Health for ten years.

“Leaving there was the most bitter pill I've had to swallow,” she admits.

Ahola currently has roughly six months left on her one-year employment contract. “I'm constantly looking for jobs.”

Pekka Torvinen – HS
Aleksi Teivainen – HT
Photo: Liisa Takala