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In a surprising twist, Finland’s employment scene remains resilient despite a downward economic trend and rising unemployment rates. The latest data indicates that while unemployment has increased, employment figures have also seen an unexpected rise.
December saw an increase of 5,000 employed individuals compared to the previous year, but simultaneously, the number of unemployed rose by 12,000.
This simultaneous rise in both employment and unemployment signifies an expansion in the workforce, effectively offsetting the adverse effects of rising unemployment on overall employment.
The employment rate trend for individuals aged 20-64 stood at 77.5%, while the more traditional rate for those aged 15-64 was at 73.1%. Although there was a slight monthly decrease in these trend figures, it reflects a weakening employment situation in the autumn rather than a specific decline in December.
The peak of the 15-64 age group’s employment trend was in late 2022, reaching 74.2%. Since then, the employment rate has fallen by over one percentage point.
Jukka Appelqvist, Chief Economist at the Central Chamber of Commerce, evaluates, “Employment was on a weakening trend at the year’s end, but not in free fall. Despite the decline, it can be said that the labor market has withstood the prolonged economic downturn surprisingly well.”
However, challenges in labor market matching and incentives persist. As per Statistics Finland’s definition, there were 199,999 unemployed individuals in December. The unemployment rate trend stood at 7.6%, having risen over a percentage point from its lowest in spring 2022, which was 6.5%.
In December, full-time layoffs, according to the Ministry of Economic Affairs and Employment, amounted to 39,600, an increase of 16,000 from last year and 13,600 from November.
Appelqvist notes a recent phenomenon, “Despite historically high employment, there is significant unemployment and layoffs. This indicates ongoing demand for labor in certain sectors, but not necessarily reaching those who become unemployed. The root causes likely include incentive issues and other matching challenges.”
In the Uusimaa region, the number of unemployed job seekers at the end of December was 96,474, a 13.5% increase from the previous year. This rise reflects a broader national trend, with unemployment rates growing more significantly among young people under 30 and long-term unemployed.
New job openings in Uusimaa were down 38.2% from the previous year. Similarly, the national trend showed a nearly identical decrease.
“The decline in employment is still concentrated in specific sectors, particularly construction. It’s crucial for this year’s economic growth whether this decline spreads more broadly or remains a narrower phenomenon. So far, there are no signs of a more severe escalation in weak employment within the economy,” says Appelqvist.
YTK Unemployment Fund’s application numbers are higher compared to last year, with a notable increase in applications from the construction sector. Unemployment is expected to rise based on January’s application influx.
The fund’s unemployment rate in December was 6.6%, consistent with November’s figures. However, the pace of incoming applications has accelerated at the start of the year.
In the first three weeks of January, YTK received 49,005 benefit applications, a significant increase from 40,013 during the same period last year, suggesting a likely rise in unemployment rates.
Auli Hänninen, CEO of YTK Unemployment Fund, states, “Unemployment is expected to rise in January, driven mainly by the number of layoffs in the construction sector.”
Lastly, men’s unemployment has diverged from women’s in recent months, with men facing higher unemployment rates, possibly due to the long-standing downturn in the construction sector and seasonal variations.
HT
- Next Article Rising immigration boosts working-age population in Finland
Source: www.helsinkitimes.fi
