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A person examining a brochure about unemployment at a service point of the Social Insurance Institution of Finland (Kela) in Helsinki on 15 June 2020. (Vesa Moilanen – Lehtikuva)

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SOME 65,000 unemployed job seekers were not entitled to earnings-related unemployment security for not being members of an unemployment fund in Finland in May, gauges Mauri Kotamäki, the chief economist at Finland Chamber of Commerce.

“The coronavirus crisis has sadly cast the spotlight on a group of people that fall between two stools in the labour market,” he wrote in his analysis of the latest employment data on Tuesday.

“The basic unemployment allowance was paid to 65,000 people in May. These people would have been entitled to an earnings-related benefit as members of an unemployment fund, but now they fell back on basic social security.”

The benefits of unemployed job seekers can differ markedly depending on whether they are entitled to the basic unemployment allowance or earnings-related unemployment allowance. Although both unemployment benefits entail the work requirement, the latter is available only to job seekers who are members of an unemployment fund.

Kotamäki in 2018 calculated for Prime Minister Juha Sipilä’s (Centre) government that the earnings-related allowance translated to a 500-euro increase in the monthly income of job seekers earning 2,500 euros a month prior to becoming unemployed. The net total for job seekers on the basic allowance stood at 586 euros and 1,136 euros for job seekers on the earnings-related allowance.

The 33.66-euro basic unemployment allowance is presently paid for five days a week, adding up to 724 euros a month before taxes.

Kotamäki on Tuesday viewed that equality alone is reason to transition to universal earnings-related unemployment security.

“Luckily we are currently in a situation where all parliamentary parties support shifting to universal earnings-related income security. It is now the government’s turn to draw its conclusions and promote the issue. We are at a point where it is down to political will,” he said.

The Confederation of Finnish Industries (EK) and Federation of Finnish Enterprises have both pledged their support for a universal earnings-related security system, the former as recently as on Monday.

The Central Organisation of Finnish Trade Unions (SAK) and Finnish Confederation of Professionals (STTK) have voiced their reservations, saying advocates of the shift are using it as a pretext to cut unemployment security.

Finland Chamber of Commerce is currently estimating that the government remains 79,000 new employed people short of its goal of raising the employment rate to 75 per cent by the end of the electoral term, with the trend of the employment rate standing at 72.4 per cent in June.

The trend of the unemployment rate stood at 6.7 per cent.

“The trend figures unfortunately portray too positive a picture of the reality. The raw data shows that the number of the unemployed rose by almost 50,000 from last year and the number of the employed fell by almost 90,000,” highlighted Kotamäki.

Aleksi Teivainen – HT
Source: Uusi Suomi

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