Labour Minister Cronberg expects higher unemployment in new year

Tarja Cronberg

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“After Christmas unemployment will increase”, said Minister of Labour Tarja Cronberg (Green) in Brussels on Monday.
     However, she does not foresee a sudden plummet of employment of the kind that came during the recession of the 1990s, but rather a “creeping development”.
     
Employment statistics drag behind the real economy. Head economist Penna Urrila of the Confederation of Finnish Industry (EK) predicts that the worst period for unemployment will be at the end of next year, or in 2010.
     According to an assessment by the Ministry of Employment and the Economy, and the Ministry of Finance, unemployment in Finland should grow by 0.5 percentage points, from 6.5 per cent this year to 7 per cent next year. A rise in half a percentage point would mean 13,000 more job seekers.
     “We are preparing for even weaker development”, Cronberg said.
     Also typical for the age is that companies are giving out temporary layoffs, instead of eliminating jobs permanently.
     There are currently 8,400 people in Finland who are temporarily redundant, and between 21,000 and 23,000 who have been informed that they would be furloughed.
     
The Ministry of Employment and the Economy predicted in the autumn that the employment rate would decrease, with a decline of 30,000 in the number of people working.
     The explanation for this is that when getting a job becomes difficult, many stop looking for work, and go to study, stay at home to take care of the children, or retire.
     The pension wave of the postwar baby boom generation is expected to get into full swing next year.
     “Jobs are decreasing and there will be flexibility in supply”, Cronberg said.
     
In its policy programme, the government set as its goal the creation of 80.000 - 100,000 new jobs during the present parliamentary term, “if the development in the international economy will continue to be positive, and if pay trends support employment”.
     Until last summer, it looked as if the goal would be exceeded. Now Vesa Vihriälä of the Prime Minister’s Office is not sure that target will be reached.
     “In the summer I would have said that the objective will certainly be realised.”
      Vihriälä is concerned about what will happen to ageing workers.
      “In recent years we have managed to extend people’s working career from the tail end. Now there is the danger that with a recession, we will start pushing people at the older end of the scale into the pension tube.”
     Cronberg also predicted that demand for ageing workers will be weaker than before.


Previously in HS International Edition:
  Labour Ministry predicts 13,000 new jobless next year (12.11.2008)
  Construction company Skanska to cut 600 jobs in Finland, 3,400 in Nordic region (26.11.2008)
  Nokia Siemens Networks cutting 750 jobs in Espoo (12.11.2008)

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