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Business think tank: Double the immigration rate

A leading Finnish think tank is calling for a doubling of immigration to meet the country's employment needs. The pro-business EVA warns that employment will remain low unless there is a strong influx of workers from abroad.

Suomen kielen opiskelijoita Vanajaveden Opistossa
Immigrants learning Finnish at Vanajavesi College in Hämeenlinna. Image: Ville Välimäki / Yle

An EVA report out Thursday estimated that Finland needs 34,000 more immigrants annually to meet the sustainability gap as the population ages. That’s nearly double the current rate of some 18,000 immigrants a year.

The sustaimability gap refers to the additional financing needed to balance the public sector in the long term. So essentially immigrants are needed to help foot the bill for future public spending.

Over the past quarter-century, they say, the number of individuals working in Finland has basically remained the same – only growing by some 2,000 while the population has soared by some half a million. And as the recession has brought a loss of 100,000 jobs, this adds up to an impossible equation, says EVA.

The think tank calculates that the working share of Finland's society has fallen to 69 percent, whereas it should be at 75 percent to support the swelling population of elderly people.

EVA notes that two thirds of new immigrants are of working age, and are mostly from Europe and Asia.

A shot in the arm

While it may seem paradoxical to bring in more foreign workers when the unemployment rate is above eight percent, the report’s co-author, researcher Pekka Myrskylä, argues that new immigrants would also stimulate domestic demand and generally give the economy a much-needed shot in the arm.

He and his co-author, actuary Topias Pyykkönen, claim that an expanding workforce would boost companies’ incentive to expand their operations. The researchers also note that nearly one third of Finland’s current jobless – or some 100,000 people – are difficult to employ.

“Many jobseekers have various factors that slow their employment prospects,” says Pyykkönen.

“These include a lack of education, age and protracted unemployment, for instance.”

The workforce shrinks by some 10,000 people annually as the number of retirees exceeds the number of people entering the job market.

“Immigration already plays a significant role in replacing the natural attrition among the native-born population,” says Myrskylä. “Without immigration, our working-age population would have shrunk by 26,000 people last year alone.”

Half find work

Pyykkönen and Myrskylä note that just over half of present-day immigrants are now employed. Some, such as Estonians – who have a similar linguistic and cultural background – find work easily. However, those who arrive as refugees have a hard time, they note.

Typically immigrants find work in low-paying sectors, particularly in the Helsinki region. The largest numbers are in real estate services – such as cleaning – as well as in restaurants and construction. Many also set up their own companies. Some two thirds, the report says, are of European background, followed by Asians. The most common countries of origin are Russia, Estonia, Somalia and Iraq.

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