The Central Organisation of Finnish Trade Unions SAK has estimated that the government’s so-called activation model has resulted in unemployment benefit cuts to the tune of 80 million euros. According to SAK director for law and work environment Annika Rönni-Sällinen this amounts to a significant cut in benefits.
Data from Finland’s benefits agency Kela, indicate that roughly half of people receiving unemployment benefits had their payments cut at the end of the first three-month evaluation period in early April. The measure requires unemployed jobseekers to either participate in approved training courses, work for 18 hours of pursue entrepreneurship to maintain their benefits.
Those who failed to meet the criteria had their benefits cut by 4.65 percent, or around 32 euros monthly.
Impact of model not evenly distributed
The union expert pointed out that the model affects jobless people differently, depending on the industry in which they are looking for work. She noted that in some industries it is easier to secure temporary gig work to help them meet the requirements of the activation model.
“For example in the service and construction sectors, one-third of the unemployed do not meet the requirements of the activation model, about two-thirds do. But in other industries, it is around 60 percent who do not meet the criteria,” Rönni-Sallinen remarked.
The specialist also noted that regional differences and age affect outcomes in the new system.
“We have been informed that older people in particular have difficulty meeting the criteria, and they are not always offered any activation measures,” she added.
Rönni-Sällinen stated that overall there are insufficient job vacancies and inadequate resources for training and other activation measures.
Professor: Threshold for activation should be lower
Turku University labour law professor Seppo Koskinen said that the activation model makes for interesting research material. He added that a key issue is whether or not the measure helped to create long-term work for the unemployed.
“It can already be seen that the model works better in some industries than in others and the regional differences are staggering,” Koskinen noted.
He stated that it is important to ensure that the unemployed have a real opportunity to do things that fulfill the criteria in the activation model. There should be a carrot, not just a stick, he said.
“Since a penalty has been imposed, the threshold for fulfilling the conditions should be low. Otherwise the model is too strict,” he added.
Third sector an option
The professor also proposed examining ways to help people find employment in the third sector, meaning voluntary work.
“Third-sector work should be considered a normal job that is useful as an activation measure. There are many jobs that can be done; you only have to find examples for people to find short-term work. Certainly, there are hundreds of thousands of jobs here,” Koskinen explained.
Government has since announced plans to modify the current model to remedy some of the early problems.
However, the SAK’s Rönni-Sällinen said those moves are not enough, saying she has difficulty accepting the fundamental principle of the model.
“I am critical of the idea that all unemployed people are now expected to be gig workers. When someone becomes unemployed, he or she wants to find a job that corresponds to the training within their industry – this is also rational from a socio-economic perspective.”
“It’s not always possible to find the best job within three months, regardless of how actively one looks for a job. The problem is that you can be very active and apply for dozens of jobs, but still not meet the criteria [of the activation model],” Rönni-Sällinen pointed out.
“Is it in your best interest to swap industries and do short-term work just to satisfy the terms of the activation model – even if it doesn’t improve your chances of getting a permanent job?” she asked.