Finland 'leads EU' on older workers policy

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Finland's national programme for older workers - in which the social partners are central players - ended in March 2002 with a seminar to discuss its results. Research indicates that the labour market position of people aged over 45 has been improved over the five years of the programme: their employment rate has increased and the average retirement age has been raised by a few years. Finland is considered as providing an example to the rest of the EU in terms of policies to deal with the ageing workforce.

Finland's national programme for older workers was launched in 1997 (FI9708125F) and was implemented in cooperation between various ministries, the social partners and other partners. The participating social partners were: on the employers' side, the Confederation of Finnish Industry and Employers (Teollisuuden ja Työnantajain Keskusliitto, TT), the Employers' Confederation of Service Industries (Palvelutyönantajat, PT) the Commission for Local Authority Employers (Kunnallinen Työmarkkinalaitos, KT) and the State Employers' Office (Valtion Työmarkkinalaitos, VTML); and on the trade union side, the Central Organisation of Finnish Trade Unions (Suomen Ammattiliittojen Keskusjärjestö, SAK), the Finnish Confederation of Salaried Employees (Toimihenkilökeskusjärjestö, STTK) and the Confederation of Unions for Academic Professionals (Akateemisten Toimihenkilöiden Keskusjärjestö, AKAVA). The five-year programme ended in March 2002 with a seminar held in Helsinki, where the results achieved were discussed.

The goal of the programme was to improve the employment rate among older workers. A background factor was an awareness of demographic trends indicating a growth in the over-50 age group, at a time when the willingness to retire early among this group has been growing, as has the level of unemployment. If these developments continue unchecked, there will be a threat of a labour shortage in a few years' time, and this has caused concern. Finland was thought to be the first country to attempt an improvement in the employment position of older workers in line with the policy guidelines of the European Union.

Results of the programme

The aim of the programme was to change the accustomed way of solving labour market problems by 'pensioning off' older employees, a practice which had prevailed for a whole generation. The goals set were to improve 'well-being' at work, and to achieve the kind of work organisation in which older workers could be involved. According to the parties' assessment of the programme's results, the labour market position of older workers has improved during the last few years. The statistics show that the employment rate of the over-55s has improved faster than among other age groups. This is explained by the fact that many employed persons have progressed into this age group during the period under consideration. In other words, older employees have not been regarded with disfavour and pensioned off as they were earlier. The average actual retirement age has been rising constantly during the programme.

Another aim of the programme was to influence people's attitudes toward ageing and older people. Research into the programme's effects indicates that attitudes have indeed changed. Some embryonic interest is also noted in 'age management', which focuses on supporting employability - ie keeping the workforce skilled, motivated and able-bodied. Age discrimination is thought to have decreased due to this.

Ministers' views

According to the Minister of Labour, Tarja Filatov, speaking at the March conference, the general atmosphere has changed alongside economic growth - 'five years ago, company management did not speak in favour of older people.' In her view, this attitude has been replaced by a concern about the future labour force. However, the situation has turned around in such a way that it is now young employees on fixed-term contracts who now function as a buffer, and their employment contracts terminate earlier than others.

The Minister of Social Affairs and Health, Maija Perho, considered it 'demoralising' that some companies still reorganised their workforce by pensioning off older employees.

The Minister of Education and Science, Maija Rask, was concerned about the large number of poorly educated people. She saw the new programme of the parliamentary working group on adult education and vocational training as important for raising the 'know-how' level (FI0203103F).

The Prime Minister, Paavo Lipponen, emphasised the significance of work as a precondition for the welfare state. For this reason, older employees too ought to be able to 'cope' at work - 'it is a matter of being able to continue until the retirement age.' He pointed out the relatively short period during which Finnish people are members of the workforce: 'the Finns move into working life too late and exit from it too early.' A reason for this is the country's thorough education system, which is seen as taking too long. He considered the programme for older workers as a unique operational model, in which the role of the social partners has been crucial. According to the Prime Minister, the problems facing older workers include poor education and the disappearance of occupations.

As a remedy for the ageing population and the simultaneous increased demand for labour, Mr Lipponen stated that 'structural unemployment must be decreased.' With the help of the programme, there has been an endeavour to influence these structures.

Finland an exception in the EU

The deputy general director of the European Commission's Directorate General for Employment and Social Affairs, Juhani Lönnroth, presented to the conference some calculations showing that population growth in the EU will tail off in the future, with the numbers decreasing after 2023. The growth in the working-age population will stop within the next seven years. The population structure, and along with it the employment-population ratio (the relation between those actively employed and those outside working life), will change dramatically.

Whereas today, for every person over 65, there are four people of working age (aged 15-64 years), in 2050 there will only be two. This will cause problems for welfare systems. Mr Lönnroth outlined the goal agreed by the Member States at the March 2000 Lisbon European Council meeting (EU0004241F): making Europe the most competitive economy in the world, whose welfare is based on ability to innovate and also on know-how, sustainable growth and social cohesion. Central to this goal will be full employment, which means an employment rate of 70% by the end of 2010 for the whole population of working age, 60% for women, and 50% for people aged over 55. 'If we are able to achieve these goals, that will in itself result in an easing of the problems caused by the distortion of the employment-population ratio,' he stated. Concerning the role of the social partners, he said that they would have a key part to play in the implementation of the policy on ageing, at EU level as well as national level: 'this is true as regards lifelong learning, reform of working life and improvement of working conditions, as well as the control of restructuring.'

Mr Lönnroth considered it exemplary that Finland is one of the rare countries to have taken a comprehensive grip on age policy: 'Even if Finland is a small country on the EU scale, it can, through its contribution, influence two aspects: on the one hand, the results, ie growth in the employment rate in the EU as a whole; and improvement of the indicators applied to ageing persons.' He stated that Finland had, in the preparation of the EU Employment Guidelines, been reminding other Member States of the importance of this common problem.

Commentary

According to the recently published results, the Finnish programme for older workers seems to have been a success. However, it must be remembered that Finland has experienced rapid economic growth over the five-year period in question, which means that it is quite hard to differentiate the direct effects of the programme.

Nevertheless, the programme serves as a good example of Finnish tripartite cooperation. The social partners have tried to improve the position of older people at the workplace, and there has been extensive commitment to this goal on the employers' as well as the employees' side. The programme has been seen as important. The employers put more emphasis on future labour shortages and pension costs. The unions would like to see more attention paid to education, know-how and sufficient resources at the workplaces, which would promote the ability to cope at work (FI9911127F).

The goal of the programme is good, but the message from workplaces is that the older workforce is still being 'streamlined', in the finance sector for example. So, there still seems to be room for improvement in attitudes.

Finland has followed the EU guidelines in order to raise the employment level of older people, and it serves as an exceptional example in the EU as a whole. The EU institutions have aimed to improve the position of the older workforce by means of legislation, for instance. The 2000 Directive (2000/78/EC) establishing a general framework for equal treatment in employment and occupation (EU0102295F) and the action plan linked to it aim to prevent discrimination based on age (among other grounds). In the sphere of the Finnish programme for older workers, it has been considered annoying that, at the same time as the EU institutions support the employment of older workers in their speeches, they allow age discrimination in their own recruitment policy. The European Ombudsman, Jacob Söderman, recently refused to sign a decision concerning the establishment of a new European Communities Recruitment Office unless the current dictate allowing age discrimination was removed. According to the Ombudsman, the EU institutions' generally applied age-limit acts as a bad example to employers in the present EU Member States and candidate countries, as it has the result that 'people over 45 ... can legally be discriminated against and banned from the labour market'.

The reason given for this age limit is that younger workers are more effective, more flexible and more adaptable. The Finnish programme emphasises the strengths of older workers, such as stability and commitment. (Juha Hietanen, Ministry of Labour)

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