New jobs emerging in Helsinki not expected to raise tax revenues much

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The employment situation in Helsinki has improved after three years of decline. The number of people with employment has grown by four percent within a year, according to the City of Helsinki Urban Facts.
      In neighbouring Espoo and Vantaa, the growth rate was an average three percent.
      In the first half of this year about 25% more new jobs were created in the Finnish capital than at the same time in 2004.
     
The situation has changed considerably within a short time; in the two previous years the number of wage earners in Helsinki fell at an annual rate of nearly one percent.
      Although the employment figures in Helsinki have improved, it is not expected to boost the city’s municipal income tax revenues much.
      Youth unemployment has declined considerably, but the new jobs for younger workers have emerged mainly in low-paying service professions and in the social sector, neither of which boost the city’s economic growth, or its income tax revenues very much.
     
About 35,650 new jobs emerged in Helsinki from January through the end of June this year, which is nearly 10,000 more than a year earlier.
      The number of people who were temporarily laid off was more than one third less at the end of June than a year earlier.
      Helsinki appears to be moving increasingly toward a service-oriented economy. At the same time, the emergence of jobs and the maintenance of employment are increasingly dependent on household purchasing power.
      At least this year it seems that growth is based on consumer spending.
      On the other hand, Helsinki’s unemployment level remains the highest among cities in the greater Helsinki region. In August the unemployed numbered nearly 30,000, which is 9.3% of the workforce.
      In Espoo, the unemployment rate is 6.7%, and in Vantaa it is 8.1%.
      Helsinki’s high unemployment rate is partly a legacy of the recession of the 1990s. Many of the long-term unemployed who are now over the age of 50 are considered unlikely to ever get back into the job market.
     
Intense competition is another characteristic of the labour market in Helsinki. The city is constantly receiving well-trained young people, who often bypass local residents in job queues.
      In some parts of the city the local unemployment rates are considerably higher than the average for the whole city, and there are indications that this kind of unemployment could be hereditary.
      Helsinki also has more immigrants than the average for the greater metropolitan region, and immigrants tend to be more affected by unemployment than the rest of the population.
     
Students do not raise unemployment figures much, as most of them finance their studies with the help of various types of short-term and part-time jobs.
      Income differences are also greater in Helsinki than in the rest of the metropolitan area.


Previously in HS International Edition:
  Helsinki only large city in Finland to lose wage earners (28.9.2005)

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