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Preliminary results from Finland’s basic income experiment, changes in working time and annual holiday legislation, and the parliamentary elections in April are the main topics of interest in this article. This country update reports on the latest developments in working life in Finland in the first quarter of 2019.
Preliminary results from Finland's two-year basic income experiment were presented in early February. [1] During 2017–2018, 2,000 randomly selected recipients of unemployment benefits got a monthly tax-free basic income of €560. The aim of the trial was to examine new models of social security and to eliminate unnecessary bureaucracy and disincentives to work. The total cost of the trial was €20 million.
Based on register and interview data, the preliminary results show positive effects on the participants’ health and well-being, but no significant employment effects. During the first year of the trial, the experiment group did not show a significantly higher or lower employment rate than the control group. However, those who received the monthly basic income reported higher levels of well-being, lower levels of stress and less health problems after the two-year trial period. They also showed a higher level of trust in their future and about their chances of participating in society.
The need for a social security reform has been a major theme in the upcoming Finnish parliamentary elections. Most stakeholders agree that the current system needs to be adjusted to address the needs of society and working life in the 2020s. However, while some focus more on poverty reduction, others stress the need to increase the employment rate by eliminating disincentives to work.
In March, Parliament passed the proposal on a new Working Hours Act, which will enter into force on 1 January 2020. [2] The legislative framework will largely remain the same as it is under the current Working Hours Act (which dates from 1996), but changes will be made to increase the flexibility of working hours and locations.
The new act includes two main revisions. The first includes provisions for a working time model for flexible work arrangements where employees can choose the number of hours they work, when they work and where they work. Such arrangements would primarily be based on mutual trust between the employer and employee.
The second major revision is the introduction of provisions for a ‘working hour’s bank’ in legislation, allowing for the flexible use of working hours over time. In addition, the proposal includes revisions regarding the follow-up of maximum working hours, night-time work and flexible working hours.
The passing of the proposal marks the end of a lengthy political process. Initially, the government set up a tripartite working group to draft the new legislation in 2016, but this group was not able to reach a consensus. Along the way, social partners on both sides focused their comments on the scope of the new act. [3] While employer organisations saw a need for more room for local agreements on the application of the new act, trade unions – especially Akava-affiliated ones representing academic experts – demanded that the new act cover experts, whose work is often unspecific in terms of time and place.
Revisions to the Annual Holidays Act were also passed in the first quarter of 2019 and are due to enter into force on 1 April 2019. [4] The main revision concerns the right to a minimum of four weeks of annual paid leave, regardless of absence due to sick leave, recovery from an accident or occupational disease, or medical rehabilitation. Peak-level trade unions largely supported the revisions, while the Confederation of Finnish Industries (EK) criticised them for being costly from an employer point of view.
Finland goes to the polls on 14 April 2019 against the backdrop of a governmental collapse. The government of Prime Minister Juha Sipilä resigned just five weeks before the elections due to a failure to carry through its flagship project: the major social and healthcare reform.
Compared to the previous elections four years ago – when debate focused mainly on tackling public debt and balancing public finances after years of economic recession – this time the debate is being held against a backdrop of some positive economic signs. In 2018, GDP growth continued for the third year in a row. Finland saw the highest average employment rate in three decades and the unemployment rate finally decreased to a pre-crisis level. On the other hand, some of the policy measures of the Sipilä government have hit many low-paid, often female-dominated, sectors hard. In addition, industrial relations are rather strained after clashes between the government and trade unions.
Meanwhile, Finland still lags behind the other Nordic countries both regarding employment and unemployment rates. A recent report showed that with the current migration levels, a rapidly ageing population and the historically low birth rate, it is projected that the population of Finland will start to decline in 2035. [5]
Virtually all political parties and social partners agree on the need to further increase the employment rate. Employer organisations tend to focus on tax-related issues, increasing local agreements and reducing regulation, while trade unions put more emphasis on education as a means to improve employment (for example, all peak-level trade unions have suggested a raise in the compulsory education age). Social partners on both sides agree on the need to improve gender equality and the labour market participation of mothers, and urge the next government to reform the parental leave system.