SAK: Daycare price hikes will force women to stay home

Finland’s largest blue-collar labour union confederation SAK says the government has gone too far in its moves to squeeze middle class families. A new proposal to jack up the daycare fee ceiling has been widely condemned.

Image: Yle

In late January, the Finnish government announced proposals to raise charges levied for daycare spots. The proposal has been met with overwhelming negative responses after being sent round for comments.

The price hike for the highest earners could run into the tens of euros monthly, a one-off increase that most commentators have felt was too steep.

Families with children are the brunt of several price increases and savings initiatives in Finland, a trend that the SAK labour union confederation says will lead to more low-income women choosing to stay at home with their children instead of working.

The government received feedback from over fifty different stakeholders about the proposal and plans to bump up the daycare fee ceiling to over 350 euros per month was the target of the most opposition.

Municipalities aghast

A municipal survey conducted by the National Institute for Health and Welfare (THL) a few years ago surmised that 25 percent of all families utilising early childhood services paid the maximum charge. But even municipalities that stand to benefit from the price hike proposal say the principle of a sudden radical increase is unfair.

“The increase for families in the highest income bracket is too high, as many families with low incomes are included as part of that group,” says the City of Turku’s regional services director Vesa Kulmala.

Turku is considering an increase in daycare charges, but fears that families with multiple children will be unfairly burdened – a concern that several other municipal leaders, like those in Helsinki and Vantaa, share.

“Will we end up breaking the parents’ backbones? Will they start to wonder if it is even worth their while to use our services?” wonders Kulmala.

Promoting inequality

Finnish law guarantees that the country’s municipalities will be able to decide for themselves whether to enforce the payment increases. Some may choose to carry the proposal out to the letter, will others may reject it. Many decision-makers who have volunteered feedback have said this scenario will promote inequality among the country’s children.

“A child’s access to early childhood education and the cost of the service will ultimately depend on where the family lives,” says THL research director Minna Salmi.

Several comments appealed to the government to introduce a lower payment increase to offset this problem, or raise the fees in increments. Others think the income limit for inclusion in the highest payment bracket is too low and demand that it be increased.

For example, two parents with two children have to earn just over 6,100 euros monthly to be included in the highest income bracket, an amount that falls well below the average income in Finland if both parents are working. Families in the low and middle-income brackets could even earn more than this amount when their salaries are combined.

Keeping women home

Many of those who have read the proposal also fear that the increase will encourage the low-income earner in the family, usually the woman, to stay at home and care for her children longer. This often makes it more difficult for her to return to work later.

“Here the government is taking several steps backwards, towards a housewife society, a paradigm that the rest of Europe is rejecting,” says SAK economist lkka Kaukoranta.

If more mothers were to elect to stay home, Finland would also fall short of its EU-appointed target to see 95 percent of its under-four-year-old population in some kind of early childhood education programme by the year 2020.

“Finland is still 21 percentage points away from meeting this target as it is,” says Salmi.

Support from some quarters

The government proposal did find some supporters, however. The business owners’ confederation EK believes the daycare prices are still reasonable, even with the increases. The business lobby says even more money than the government’s goal of 54 million euros could be raised for the municipal coffers with customer fees.

The proposal also suggests sibling discounts, an idea the municipalities and their labour unions reject. A fine for not informing the care centre of a child’s absence during holidays, for example, is also proposed.

Almost unanimous support was given to the proposal’s idea to reduce the daycare fee or completely eliminate it for low-income families.