Photo: Kusti Manninen
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In 2023, Finland experienced a notable rise in unemployment fund claims, predominantly due to an increase in layoffs across various sectors. According to the Open Unemployment Fund (Avoin työttömyyskassa), there was an 18.9% increase in claimants receiving unemployment benefits compared to 2022, totaling 55,092 individuals. This increase was particularly marked in the latter half of the year.
Kaisa Tikka, the benefits manager at the Open Unemployment Fund, highlighted the economic downturn’s impact on industries like construction and manufacturing, which led to a spike in applications and recipients from these sectors. Interestingly, the increase in claims was not limited to these areas, as other sectors also witnessed a significant rise compared to the previous year.
In December 2023 alone, 25,208 applicants received unemployment benefits, marking a 40.9% increase from the same period in 2022. This represented over 11% of the fund’s members, a 3.4 percentage point increase from December 2022.
A significant finding of the study was the substantial growth in the proportion of furloughed workers among benefit recipients. In 2023, 48.9% of those receiving benefits were on temporary layoffs, compared to 33% in 2022. This trend was particularly pronounced after August, continuing until the end of the year.
The fund also observed a considerable rise in first-time applications, with 39,904 submitted in 2023 compared to 25,517 in 2022. There was also an increase in adjusted applications, totaling 96,900 in 2023 compared to 82,280 the previous year. Despite this, the percentage of those receiving adjusted unemployment benefits decreased slightly from 25.2% in 2022 to 21.1% in 2023.
The total amount paid out in unemployment benefits also saw a significant increase in 2023, reaching €378.7 million, which is €48.2 million (or 14.6%) more than in 2022. However, the average number of days benefits were paid per recipient slightly decreased from 102 days in 2022 to 92 days in 2023. This decrease is attributed to the nature of layoffs, which are typically shorter and not continuous, resulting in fewer days of benefit payments compared to longer unemployment periods.
Furthermore, legislative changes that came into effect in early 2024, including cuts to unemployment security, have led to an increase in inquiries and concerns among the fund’s members. Tikka expressed particular concern about the cumulative impact of these cuts, especially on families with children, emphasizing the importance of monitoring these effects closely.
This surge in unemployment fund claims and layoffs reflects the broader economic challenges faced by Finland in 2023, highlighting the need for continued support and adaptation in the face of changing labor market dynamics.
HT
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Source: www.helsinkitimes.fi
