Humiliating poor people doesn’t increase the employment rate or defuse the care bomb of the future

The care bomb is ticking, and the shortage of skilled workforce is increasing year after year. However, a solution isn’t found by making cuts to social security. The solution lies in, say, controlled labour immigration. We should also prevent the marginalisation of as many people as possible in their youth and at the beginning of their careers, JHL’s Head of Public Affairs Vesa Mauriala reminds.

“The largest costs for our national economy arise from short careers – not from occasionally utilising social security.”

The right-wing government has come to power and drawn up the Government Programme. In spite of that, the biggest issue still remains unsolved. How do we secure workforce availability while building the tools for economic growth?

It probably comes as no news to anyone that the Finnish population’s age structure causes its own challenges to welfare state operations. We have to ask whether we will have enough many professionals to run shared and vital services in the future. In light of facts, the situation is more than challenging.

The age groups that are extremely small (those born in 2010 and later) will reach working age at the turn of the 2030s. At the same time, pension expenses will have reached their peak. The health care expenses for the final years of the age groups born in the 1950s will have to be taken care of.

Labour reserve, i.e. the number of working-age people living in Finland, has been on the decline for a long time.  Since 2013, the age groups that have entered the workforce have been smaller than those leaving the workforce.

The situation will get more difficult throughout the 2030s and 2040s. The rise in pension age will continue to help for a while, but its impact will diminish in the 2030s.

These facts make it obvious that getting skilled employees is the most significant factor threatening Finland’s economic growth.

The social security cuts planned by the Government are hard methods that encourage to take any job available. However, these actions don’t increase the number of skilled employees in the Finnish labour market who are motivated by their work. Making cuts causes new problems that will increase costs later on.

What’s most essential is understanding that the largest costs for our national economy arise from short careers – not from occasionally utilising social security.

The most important thing is preventing people from becoming marginalised in their youth and at the beginning of their careers. For this, we need both age-related incentives and public services.

The second most important thing is to support coping at work and make it possible to do part-time work also when retired with the help of, say, tax incentives.  In the Swedish labour market, often used as an example in Finland, older employees are appreciated and protected.

The country’s Government took an ideological path when reacting to the need for workforce by deciding to make general cuts to social security. It would have worked better to instead concentrate on increasing Finland’s attractiveness in the eyes of skilled employees.

Now, the ever-decreasing national labour reserve is at the centre. It would have been more sustainable to move strongly ahead within international recruitment, which is where there’s far more labour available. As a part of that, we would have needed strict measures (e.g. legislative changes) to prevent workforce exploitation.

Other kinds of choices could have been made. Led by Sixten Korkman, the previous Government prepared a report: “Suomen suunta – tuottavuuden ja työpanoksen kasvu turvaavat tulevaisuuden hyvinvoinnin”. According to the report, the sustainability of Finland’s welfare and economy depend on the evolution of productivity as well as how the availability of skilled workforce is secured in the labour market.

In practice, all political parties agree that the Finnish social security system must be simplified, welfare traps must be eliminated, and social security must be made smoother for customers. Various parties have models for this, and also the parliamentary Social Security Committee has processed this during the previous Government’s term in office. To speed up processing, the Finnish Federation for Social Affairs and Health has with Kela proposed that a “benefit proposal” is adopted during this parliamentary term. The idea is to reduce the complexity of the benefit system.

The “incentive” that’s a stick often hits the same target. It targets those people in Finland who aim to behave responsibly but, for instance, work in sectors where working life is more fragmented than elsewhere. There’s a lot of seasonal unemployment or part-time work being done in these sectors. Furthermore, a person’s family situation may occasionally force the person to lean on social security. In general, we’re talking about people whose monthly gross income amounts to approximately EUR 1200–2000.

Now, the country’s Government is also planning to cut from the low level of social security for which Finland has already received several complaints. This would mean cutting from those who often have more difficulties than others in finding work because of their life situation (long-term unemployment, substance abuse etc.). Among this group, the “incentive” will not lead to employment without employment-promoting services. It will lead to increased poverty.

Finland is struggling with an increasingly serious shortage of labour as a result of demographic change, and we’re almost forcing our national employment rate to rise. We’re reaching the end of the line, meaning that the national labour reserve suitable for open labour market is getting smaller every year. We’re in a situation where hard incentives are starting to increase society’s total costs as a result of problems caused by poverty.

Meanwhile, the Government is making labour immigration more difficult – although it’s saying it wouldn’t do such a thing. Our key ministries are in the hands of Finns Party members (Ministry of Finance, Ministry of the Interior, Ministry of Justice). Within the Finnish Government, and with the help of resource steering, it’s possible to make a difference to operating conditions. In the ministries that usually steer labour immigration and immigration, Finns Party members hold nearly all posts.

When trying to secure workforce availability, the current level isn’t enough. The main responsibility for immigration policy governance should be transferred (without disbanding the Finnish Immigration Service) to the Ministry of Economic Affairs and Employment of Finland’s area of responsibility. It would have been necessary to shift the focus of immigration policy from a police matter to securing workforce availability.

During this Government’s term in office, we’re sinking into a state of stagnation instead of moving fast like we should. From the perspective of customers arriving to work in Finland, it would be important to create a so-called non-linear model for labour immigration. The model would enable people to take care of matters with authorities with a one-stop shop principle, through an application, and authorities would take over the responsibility for processing the customer’s matter. 

Solving the problem will be a task for the country’s next Government, which will have even less time to fix the situation. The problem will namely be very acute right at the beginning of the 2030s. Right now we’re losing time, which is a setback for Finland’s attractiveness in the eyes of foreign workforce.

Supporting labour immigration is a vital method with which we can react to the care bomb of upcoming years.