Helsinki (13.08.2020 - Heikki Jokinen) In June, a debate on earnings-related unemployment security got underway in Finland. Some right-wing politicians and the employers' federation EK proposed closing down the existing unemployment funds and starting up a new state institution to distribute benefits to everyone under uniform rules.

As things now stand, membership of any of the 24 wage and salary earners unemployment funds confers the right to a higher, earnings-related unemployment benefit.

All but one of these funds works in connection with the trade unions. However, a fund member need not necessarily be a union member and the funds are administered independently.

In August, the Board of the Central Organisation of Finnish Trade Unions SAK said it welcomes the discussion on earnings-related unemployment. Earlier this summer, however, the case being put forward by the employers federation and some politicians was perceived as being just and fair, but without defining precisely how this was to be carried out in practise.

In fact, the people now clamouring for earnings-related benefits for everyone are the same people who wish to impose major cuts in unemployment benefits. EK have even proposed extending the length of time one has to have worked from 26 weeks to one year in order to be eligible for earnings-related benefits. These restrictions would seriously affect all unemployed people.

Nor was there any discussion or investigation into why some employees were unwilling to join the existing funds, the Board says.

For a genuinely just system

"Merely the fact that unemployment security is general, does not make it just", says SAK President Jarkko Eloranta.

"This is especially true for those wage and salary earners, whose fate is zero-hour contracts, part-time job and fixed-term employment or low incomes."

The SAK Board suggests - that if there is a genuine wish to make quick improvements to the problems concerning unemployment security - then even people on short term employment contracts should be given the right to earnings-related unemployment benefit.

Also, the lowest benefits should be raised and the waiting periods for those eligible for benefits to be made more reasonable.

"These changes would be quick and easy to do", Eloranta says. "These changes would improve the situation of young people with temp and odd jobs and make it easier for those trying to make a living at the lower end of the labour market."

Ordinarily a member of the unemployment fund must have at least 26 weeks employment to be eligible for earnings-related benefits.

SAK wants this time limit to be replaced by a benefits system based on incomes instead. This makes the system simpler and encourages people to take short time job contracts, SAK believes.

On top of these improvements SAK supports the goal to get the earnings-related unemployment benefit to cover all wage and salary earners. Reforms to unemployment security must be done as a whole and various alternatives should be considered more closely.

According to SAK, the existing system conserning unemployment funds is a sound and solid basis for further development. Reforms for the unemployment security must be done as a whole and various alternatives should be considered more closely.

SAK had already proposed in June 2019 several reforms to the unemployment funds. One of the proposals was to raise the needed number of members to - for example - 50,000 instead of the 8,000 today. This would lead to bigger funds with better resources for services, also digitally.


Read more:

Wolf in sheep's clothing, say unions of the employer's lobby EK new policy concerning unemployment funds (30.07.2020)

Right-wing party wants to sideline Union unemployment funds (06.03.2018)