EU placing restrictions on subsidised employment
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The possibilities of the third sector in offering employment to the long-term unemployed, and for those for whom it is difficult to find and hold down a job, could weaken considerably if the EU’s De minimis rule comes into effect in the way that the Ministry of Employment and the Economy has planned.
Currently, entities such as associations, foundations, or workshops engaged in business are entitled to subsidies if they give work to a person who has found it difficult to find and hold down to a job. The EU rule would limit the subsidies to EUR 200,000 in a three-year period.
Alternately, the recipient of the employment support could acquire half of the total costs of the operations through business activities. Up to now they have been able to finance their activities completely with employment subsidy money.
The aim of the EU rule is to prevent public funding from distorting competition.
According to Lea Karjalainen, executive director of the National Cooperative Organisation of the Unemployed (TVY), the rule would limit the number of subsidised employees to five. Currently, the largest associations can have as many as 100 people doing subsidised work.
The Association of Finnish Local and Regional Authorities (KL) has concluded in its own calculations that after a short transitional period, associations, as well as municipal foundations, for instance, could have a maximum of seven people in subsidised work schemes in the course of a year.
“Why are the jobs of 10,000 people being endangered during a recession?” Karjalainen asks.
“The third sector gives jobs to the long-term unemployed and those with physical limitations, who have not found jobs on the free market. Do we really want these people, who are getting rehabilitation through work, and who are paying taxes, to become customers of social services again?”
If the 10,000 people who are now being employed with the help of subsidies, would have to be hired as municipal employees under a minimum wage of over EUR 1,329, the wage costs in a year would be about EUR 159 million, whereas subsidised employment under the present system would cost EUR 125 million a year.
Helsingin Sanomat
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| 14.9.2009 - TODAY |
 EU placing restrictions on subsidised employment |
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