Ministeri Lindström: Työttömyys maksaa liikaa yhteiskunnalle

Ministry of Economic Affairs and Employment 21.1.2019 10.47 | Published in English on 24.1.2019 at 13.48
Press release

– Työttömyys maksaa liikaa yhteiskunnalle. Suomella ei ole varaa näin suureen kuluerään vuosittain. Ei, vaikka viime vuosina työvoiman vahvistunut kysyntä ja aktivointitoimet ovat vähentäneet työttömien määrää selvästi, sanoo työministeri Jari Lindström.

Minister Lindström: The cost of unemployment is too high for society

“The cost of unemployment is too high for society. Finland cannot afford such a large annual expense item, even if the recent increase in demand for labour force and activation measures have resulted in a significant reduction in unemployment,” says Minister of Employment Jari Lindström.

Minister Lindström wants to encourage public debate on the sizeable costs of unemployment. In 2016, the total cost of unemployment in Finland amounted to EUR 8.8 billion, with the loss of tax income and unemployment insurance contributions accounting for EUR 2.1 billion. Minister Lindström points out that the current economic boom will inevitably be followed by a slowdown. This is one of the reasons why steps should be taken to reduce the costs of unemployment. 

Providing access to full-time work to one unemployed person would generate annual savings of roughly EUR 7,000 on unemployment benefits. “Measures such as effective employment services and timely, individually targeted services not only reduce unemployment, but they also affect the income level after unemployment. TE services have been able to successfully address this challenge in recent years,” says Minister Lindström.

“Offering pay subsidy to promote employment in the private sector, apprenticeship training, and vocational training have a positive impact on both employment and on income during a three-year follow-up period,” says the Minister, listing some of the most effective employment measures.

Providing access to employment to just one long-term unemployed could save the society EUR 11,000 even though the costs of pay subsidy for the long-term unemployed are higher than on average, and the probability of the long-term unemployed finding work on the open job market is smaller than on average.

“For the long-term unemployed, being on a path that takes them closer to the job market and being included in society has intrinsic value, even if the financial effect is not immediate. The Government’s measures in the labour market have resulted in a reduction in long-term unemployment, generating concrete financial results to society,” the Minister concludes.

The results on which the Minister commented are from the report “The total cost of unemployment” published on x x 2019. The research project was conducted by Pellervo economic research institute as part of the implementation of the Government plan for analysis, assessment and research.

The total cost of unemployment -publication

Read the press release including results.

Inquiries:

Jami Arvola, Special Adviser to the Minister of Employment, tel. +358 50 447 1255
Hanna Hämäläinen, Ministerial Adviser, tel. +358 29 504 7060