Friday 9/24/21

Rinne wants to eliminate the activation model that punishes job seekers for not finding work

"I don’t believe that it has produced a single new job", the Finnish Primer Minister remarked in an interview with Yle.
Rinne, in a meeting with citizens at Riihimaki's library. Photo: Kosti Keistinen/Valtioneuvoston kanslia.

The most damaging aspects for workers of the so-called activation model can have their days counted. 

That is at least what follows from the statements made by the Finnish Prime Minister, Antti Rinne, to the Finnish broadcasting company (Yle), in which he said that from 1 January 2020 he will work to roll back this activation scheme, that essentially penalizes unemployed job seekers for not finding jobs.

During the interview with Yle, the Prime Minister explain that his administration aims to at least eliminate the element that cuts jobseekers's unemployment subsidies by 4.65% if they are unable to find work, earn money as entrepreneurs or provide proof of training during the previous three months.

More specifically, the job seekers must either find employment for 18 hours in a three month period, receive entrepreneurial income of at least 241 euro or participate in a five day training course or be available for other services offered by the employment offices.

But most of the unemployed persons are unable to work as employees or to create their own business, and do not get any proposals from employment offices either. The outcome usually is that they are penalized with cuts in unemployment benefits that further lower their living conditions, according to the trade unions.

"Humiliating penalty" for the unemployed 

The so-called activation model, launched by the previous Government of Prime Minister Juha Sipilä, has been criticized by social agents, who have questioned its usefulness. At the beginning of this year, a survey conducted by the Central Organisation of Finnish Trade Unions (SAK) concluded that this mechanism only served as a "humiliating penalty" for job seekers who did not succeed in their search for work and to cut unemployment benefits.

In his interview with Yle, Rinne -a lawyer who started his political career in the field of unions- even mentioned the possibility of suppressing the system as a whole. "I don’t believe that it has produced a single new job. It has been a benefits cut that has increasingly pushed people toward income support. This will be addressed," Rinne remarked.

Positive aspects

However, the prime minister acknowledged that there are some aspects in the activation model that have had a positive impact. For example, he mentioned the system of regular interviews of unemployed persons as an useful instrument. Currently, governmental working groups are trying to assess the impact of the whole model in the work market, he explained.

Rinne said that some legal issues have slowed down the process of dismantling the activation model. 

During the interview, the Prime Minister explained that the new Government is willing to bring new, fast-acting employment-boosting measures to budget talks due to begin in the autumn. For that purpose, it has also asked labour market organisations to submit proposals.

New online service

Rinne said that one of the ideas the new administration is considering is the creation of an online service in which unemployed job seekers could apply for a wage subsidy equivalent to the labour market subsidy. At the same time, employers would be asked if they are able to hire an employee using the wage subsidy. The outcome would be a kind of wage subsidy 'Tinder service.

One of the goals of this administration is to create at least 60,000 jobs during its four-year mandate and to raise employment rate to 75%.

Rinne wants to eliminate the activation model that punishes job seekers for not finding...