Finland’s employment measures are lagging behind other OECD countries

OECD jobless total hitting the highest since World War II

print this

Compared with most industrialised countries, Finland is skimping on unemployment measures.
     
According to an annual report released on Wednesday by the Organisation for Economic Co-Operation and Development (OECD), Finland has not much increased the number of its active labour market programmes since the outbreak of the increasingly deep unemployment crisis.
      The unemployment rate has gone up in most OECD countries, often at an unprecedented pace, and further increases are projected in 2010.
      The OECD report shows that the current unemployment rate in its 29 member countries is already some 8.5 %, which is a new post- World War II record.
      In spite of the first dawning signs of economic recovery, the unemployment rate could hit a new high of 10 per cent next year, with 57 million people out of work in the OECD countries.
     
The global recession following the financial crisis is more and more evidently turning into an unemployment crisis.
      ”Unemployment is the core question of the current crisis. It is vital that all governments now concentrate on helping job-seekers over the coming months”, said OECD secretary Angela Gurría, who presented the new report in Paris.
      The OECD compares the trajectory of the current rise in unemployment with that seen in the 1973 recession.
      Over the past two years after the onset of the crisis, the growth rate of unemployment has been 10 per cent faster than in 1973. Moreover, in one year the difference could be nearly 30 per cent.
     
In 1973, the unemployment rate flattened out approximately two years after the start of the recession.
      Currently, the OECD’s projection suggests the rate will continue to rise until the end of the third year before starting to level out.
      The situation in Finland is at least as bad as in the other OECD countries. According to an estimate published on Tuesday by the Ministry of Finance, the unemployment rate will be 10.5% in 2010.
      On Wednesday, the Finnish Tapiola Bank predicted that the figure would be 11%.
     
Finland should take all possible actions to reduce the unemployment rate and to alleviate its conequences. In the light of the OECD report, the measures have been insufficient so far.
      The organisation compares the discretionary use of money to ease the crisis in 20 member countries. The costs of active labour market measures are examined in proportion to both the GDP and the costs of employment measures in a normal year - in this comparison the year 2007.
     
Only Austria and Belgium have have focused on crisis prevention less than Finland.
      While the percentage of GDP used for this purpose in Finland is only some hundredths, the corresponding figure in Sweden is 0.17 %, and in Poland and Portugal more than 0.30 % of the gross domestic product.
      Denmark and Switzerland are not included in the comparison, as these countries do not have any discretionary employment expenses. In these countries additional funds for retraining, employment subsidies, and employment benefits are granted automatically when the unemployment rate goes up.
     
Minister of Labour Anni Sinnemäki (Green League) had not yet read the OECD report on Wednesday.
      Nevertheless, according to her, it is clear that the funds for active job creation measures will not grow in the same proportion as the unemployment hike.
      In 2009, Finland is to use a total of EUR 560 million for such purposes. Of this sum EUR 530 million is to come from the government’s own budget, while the rest will be granted by the European Social Fund (ESF).
      In 2010, the total sum will amount to EUR 590 million. These funds will be sufficient to take active measures in order to reach some 21 % of the unemployed.
      In 2007, the corresponding figure was 25 %.
      At that time, the sum was smaller, but the unemployment rate was also essentially lower, namely 6.4 %.


Previously in HS International Edition:
  Finance Ministry expects slight economic improvement next year (15.9.2009)
  Immigrant workers are first to suffer from reduced employment opportunities in recession (31.7.2009)
  EU placing restrictions on subsidised employment (14.9.2009)
  Two economic forecasts promise slightly improved conditions for end of year (2.9.2009)

Links:
  OECD Employment Outlook 2009: Tackling the Jobs Crisis (.pdf file)
  The ESF website of the Finnish Ministry of Labour

Helsingin Sanomat