THE FINNISH LABOUR MARKET is showing signs of slowing down after an exceptionally strong year, indicates a short-term labour market forecast published on Tuesday by the Ministry of Economic Affairs and Employment.
The forecast shows that employment growth will halve from the previous year in both 2019 and 2020.
Despite the slowdown in the labour market, the employment rate is forecast to climb to 72.8 per cent in 2019 and to 73.4 per cent in 2020 and the unemployment rate to drop to 6.3 per cent in 2019 and to 6.0 per cent in 2020.
The ranks of the employed are expected to increase by 7,000 in 2019, representing a notable decrease from the previous year. With the size of the labour force no longer growing noticeably, the increase in the ranks of the employed will be derived primarily from the ranks of the unemployed, according to the forecast.
The Ministry of Economic Affairs and Employment also reminded that employment growth is already being curtailed by labour market mismatch, structural unemployment and changes in the age structure of the population. The projected growth, it added, is reliant almost exclusively on the service industry.
Raising the employment rate is set to be at the top of the agenda of the next Finnish government.
Antti Rinne, the chairperson of the Social Democrats, has stated that the government should adopt the objective of raising the rate to 75 per cent. Rinne has also pledged to abolish the cuts in unemployment benefits introduced as part of the activation model for unemployment security if he succeeds in forming a majority government.
The Research Institute of the Finnish Economy (Etla) on Monday said the employment rate target cannot be met without implementing major structural labour market reforms and forming wages in a way that supports competitiveness.
Aleksi Teivainen – HT
Source: Uusi Suomi