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Great Savings in Tackling Long-term Unemployment

Municipalities are lax to address long-term unemployment, although tackling the problem would bring financial gains. If municipal authorities don’t activate the chronically jobless, cities become liable to pay half of costs, according to legislation enacted three years ago.

Työtön työnhakija
Image: YLE

Currently, municipalities hand over more then one hundred million euros to the state for not re-integrating the long-term unemployed back into the workforce.

The municipalities that have paid the most for neglecting the long-term jobless are Helsinki, who paid 13 million euros, Tampere, more than 7 million, Turku, nearly 5 million, Oulu 3.5 million, Joensuu 2.5 million, Kuopio over 2 million, Rovaniemi close to 2 million and Kajaani just under one million euros.

The unemployment compensation is paid by municipalities to the Finnish Social Insurance Institute Kela, without many city leaders being aware of the financial outflows.

The Cooperative of Unemployment Organisations has monitored three municipalities of similar size, Raisio, Kaarina and Heinola and their activities related to tackling unemployment. The organisation notes that heinola paid out one million euros, whereas Kaarina forked out just one-tenth of that – 100,000 euros. In the town of Raisio, the payments declined quickly, once authorities realised how much it cost to ignore the unemployment problem.

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