A client outside the TE Office in Pasila, Helsinki, in August 2021. (Antti Aimo-Koivisto – Lehtikuva)

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FINNISH ECONOMISTS have expressed their concern about long-term unemployment amid improvements in both the employment and the unemployment rate.

Statistics Finland on Tuesday revealed that the ranks of the employed increased by 60,000 women and 28,000 men from the previous year to 2,533,000 in January. Those of the unemployed decreased by 31,000 to 206,000.

The trend of the employment rate stood at 73.5 per cent and that of the unemployment rate at 7.0 per cent after the first few weeks of 2022.

Juho Keskinen, an economist at the Finnish Mortgage Society (Hypo), told STT that the numbers are indicative of strong momentum and rapid economic recovery in the face of the lingering threat from the coronavirus pandemic.

“The outlook is two-faceted, however. The employment growth is largely explained by an increase in fixed-time employment contracts and part-time work, which is an indication of the uncertainty felt by employers in the middle of the protracted coronavirus crisis,” he commented.

Jukka Appelqvist, the chief economist at Finland Chamber of Commerce, argued that interpreting the statistics as a sign that the employment situation is improving would be excessively optimistic. What is clear, however, is that the economic effects of the wave of omicron infections will remain limited, as the number of temporary lay-offs remains low compared to earlier phases of the pandemic.

“Omicron seems to be mostly bringing a temporary slowdown in the labour market and the employment situation is developing well from a historical standpoint. The duration of temporary lay-offs will probably also be short and the negative effects consequently limited,” he commented.

Both Keskinen and Appelqvist expressed their concern about long-term unemployment.

“Before the pandemic, there were roughly 62,000 people who had been jobless for more than a year in Finland. The number is now as high as 106,000. The number of open jobs has simultaneously risen exceptionally high, but the unemployed are either unwilling or unable to accept these jobs,” said Keskinen.

“The snail-paced decline in long-term unemployment sends a rather savage message about the labour market mismatch,” echoed Appelqvist.

Keskinen predicted that the mismatch will begin to inhibit economic growth by year-end.

Aleksi Teivainen – HT

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