An end to unemployment?

Is there enough money for pensions?

Let's put age-related resources to work: Fifty-year-old Acts Differently from a Twenty-year-old

Trends of Social Security in Finland in 1997-98: Long-term Benefit Dependence on the Rise

Welfare services must be protected

Helsinki (16.08.1998 - Kimmo Kiljunen*) The average Finn has a higher income level nowadays than ever before. It is therefore incredible that the economy and ordinary welfare service provision should be in such a critical condition. The problem cannot be lack of material resources. Rather it is a question of finding the political will for social development.

The main problem is a tendency to make employees pay for economic problems in the public sector. In many municipalities, decision-makers try to balance their budgets by temporarily laying off staff and in the worst cases even though redundancies.

This policy undermines morale among employees, making efforts to improve the economy still more difficult. Expertise and co-operation between municipal staff is essential if local government functions are to be made more effective and rationalised. Lay-offs and the threat of redundancies are poorly suited to this aim.

Furthermore, when public sector employees are laid off or made redundant, they do not merely vanish from the public sector. Instead, an active employee becomes a passive consumer of unemployment compensation and income support. To make matters worse, the public sector also loses tax revenues. There is no sense in such policies.

The government of Prime Minister Paavo Lipponen is trying to reduce unemployment by one half - and some positive results have been achieved through this effort. The unemployment rate has slowly fallen. How much better the situation would be if the public sector, and especially the municipalities, could adopt a firmer role as employers instead of decreasing their interest in employing people. Demand for public services has steadily increased.

During the 1990s the municipalities have cut their staffing levels by 50,000 and they currently have about 400,000 employees. The State has reduced its staff even more drastically, from 210,000 to less than 130,000. This reduction is partly due to changes in the status of several public sector organisations which have become privatised commercial institutions and companies. Even so, this process has led to the loss of 25,000 jobs.

If the State sector had not axed 75,000 jobs, we would clearly be on the path to halving unemployment. This figure is equivalent to three percentage points of the rate of unemployment.

It must be remembered that the State and municipalities are not commercial enterprises. Problems of management in the economy cannot be solved through business economics, nor does this provide a basis for evaluating results.

The task of the public sector is to provide public services, which both increase our well-being and equalise our life opportunities.

The success or failure of municipal functions cannot be read on a balance sheet. The only measure of success is the quality of the service provided. This is something which we subsidise by paying taxes. Ultimately public sector resources will suffice for what we want to have. The State and the municipalities have the right to use coercive measures to acquire resources. Business enterprises have no such right.

Economic problems have undoubtedly also forced the public sector to make savings. There are also circumstances which demand staff cuts for the public good. In such cases cuts are beneficial to the public.

However, we are all taxpayers and social security clients. Those in weaker positions are more dependant on public services.

This means that a demand to cut back on public services is also a political demand. Some people seek to improve society in a manner which mainly favours those in a more privileged position.

* Kimmo Kiljunen is a researcher specialised in third world development issues. He has been a Social Democratic Party Member of Parliament since 1995.

This article was originally published in "Auto- ja Kuljetusala" 1-98, the magazine of the Transport Workers Union.

An end to unemployment?

Helsinki (14.08.1998 - Juhani Artto) A few years ago the labour researcher Kimmo Kevätsalo* proposed an hours of work model for industrialised countries which would eliminate unemployment. He recently repeated this proposal after learning of a similar model proposed by Dr. Patrick M. Liedtke, a member of the Club of Rome working group.

The basis of Kevätsalo's model is a 20-hour working week. Employers would be obliged to offer work to all citizens of working age so that nobody would be forced to remain unemployed. "The pay for this weekly 20 hours of work, which would be mandatory for both employers and employees, could be set at the average level of present unemployment compensation (or the minimum income level)", Kevätsalo writes in his column in the Metalworkers Union publication "Ahjo" (6-98).

"Any remaining work would be performed flexibly either by employees or by entrepreneurs of various kinds. A few people would not exceed the 20-hour norm, earning only the minimum wage, while others would perform a weekly 40-60 hours of demanding skilled work earning as much as high income workers under current conditions."

"The constitutional right to work would become a reality and labour market flexibility would significantly increase."

In an interview conducted by Matti Arvaja and published on 29.03.1998 in the South-West Finland daily newspaper Turun Sanomat, Kevätsalo adds further ideas and details to the model, emphasising that a general reduction in working hours is not the objective.

"Implementation of my proposal would most likely lead to longer working hours. Only the working hour norm would be halved."

As his motive for developing the model Kevätsalo, refers to high unemployment and the need of enterprises for a more flexible workforce.

In Kevätsalo's opinion, future hours of work cannot be based on a fixed working week of 37.5 hours. For those working only 20 hours per week, hours of work could be evened out to achieve the norm within a year.

The rate of pay for work beyond the weekly 20 hours would be determined freely by the labour market. This, Kevätsalo believes, would be welcomed by higher salaried employees who nowadays usually enjoy no limitations governing the extra hours which they have to work without overtime compensation.

Kevätsalo has no illusions about probable immediate reactions to his proposal. "I know that the idea is far too radical to lead to any substantial concrete measures for quite a long time", he writes in Ahjo.

*Kimmo Kevätsalo is a researcher at the Finnish Metalworkers Union.

Is there enough money for pensions?

Helsinki (02.08.1998 - Rauno Pentti) Finns are currently engaged in a lively debate about the statutory pension insurance system and the financing of future pensions.  Experts have presented a wide range of views and calculations in the course of this debate.  Some experts believe that the present pensions system is adequate to meet future needs, while others are more doubtful and call for changes to the system.

Conflicting visions as to how future pensions will be financed are worrying citizens. More than 80 per cent doubt society's ability to ensure adequate pension security in the years to come. As many as three out of four people believe that politicians don't take the issue seriously enough.*

Carin Lindqvist-Virtanen, senior researcher at the Ministry of Social Affairs and Health, considers citizens' concern understandable. "Our present national pension system, which provides basic social security for all, was created in the 1930s, and the earnings-related pension system goes back to the 1960s. In the beginning, both schemes were very feasible, as many paid pension premiums but few people were retiring.  Now things have changed. The population is ageing, and the number of people retiring is growing at an alarming rate.  There is, quite naturally, cause for concern about the capacity of the pension system to withstand financial pressure," she explains.

All the same, Lindqvist-Virtanen believes that the situation can be kept under control in the years to come. "If the national economy grows steadily and unemployment can be reduced to a reasonable level, in my view we have nothing to worry about. The impending retirement of the post-war baby-boomgeneration will not change the situation all that much."

According to Lindqvist-Virtanen, the national pensions are appropriated from the State budget on the basis of a pay-as-you-go scheme. The funds needed for the employment pensions and the day-to-day pension expenditure are collected from employers and employees.

"As far as the national economy is concerned, both the pay-as-you-go scheme and the funding scheme are of almost equal significance. The pay-as-you-go scheme, however, reacts more slowly to changes, as the monies available depend on the number of people receiving pensions, on the one hand, and on those paying pension premiums, on the other hand. The funding scheme is a more flexible system, as it means that one third of the funds available are set aside to balance the fluctuating need for financial resources," she says.

Lindqvist-Virtanen adds, that the financing of pensions is based on distribution of the national economic' "pie". "In other words, the question is: Do we think that every one contributes to the result? Or do we think that the outcome is the result accomplished through the persistent efforts of only some people? I believe that the majority of Finns will continue to support a system based on equality, which also means that the economy of senior citizens should be safeguarded."

There are, of course, people who aren't convinced by the optimistic calculations. Many experts and politicians have demanded higher returns on the monies invested by the pension funds. They have suggested, for instance, that the funds should adopt a more liberal investment policy.

"The Government has, in fact, accepted the principle that pension funds may make investments on the open market and be more exposed to market fluctuations. That should increase the returns, although a greater element of risk is involved.  To counteract the risks, the insurance companies administering pension funds should increase their equity as a buffer against stock market losses. Furthermore, we need to determine the upper and lower limits as to what share of the funds may be invested. These measures should prevent risky speculation with pension funds," she continues.

Increasing the employee's share of the pension premium considerably has been suggested as a further means of reinforcing pension funds. It is thought that this would motivate employees to accumulate more earnings-related pension, and would increase their interest in profitable investments by pension funds. "Increasing the employee's share of the pension premium may have the desired effect, as long as we don't loose sight of future pensioners who cannot accumulate their own pensions, for whatever reason," Lindqvist-Virtanen points out.

The uncertainty about the sufficiency of future pension benefits has also activated insurance companies, which are now competing fiercely in the sector of individual pension insurance schemes. These schemes, at least so far, are an attractive and popular alternative, thanks to their tax-deductible premiums. Now the Ministry of Social Affairs and Health is planning to change the taxation of individual pension insurance schemes, the intention being that individual pension insurance should lead to a reduction in the flat-rate basic benefit paid under the national pension scheme, as is the case with employment pension schemes. In addition, the working group appointed by the Ministry proposes that the retirement age granting the right to this tax deduction should be raised from 58 to 60 years.

The pension insurance companies and the Taxpayers' Association of Finland alike have rejected the amendments proposed by the working group as unreasonable, whereas Lindqvist-Virtanen is in favour of the proposal, seeing it as a step the right direction. "It seems unfair to me to support individual pension schemes at the expense of tax revenues. It is particularly problematic when corporate dividends are used as premiums in order to minimise statutory pension expenditure and to benefit from the low capital tax rate," she explains.

Lindqvist-Virtanen considers the idea of raising the retirement age according to the proposal particularly necessary in order to keep the situation under control in the future. Finns retire, on average, at 59 years of age.  This is unusually early by international standards. What is more, merely four percent of the population works until the statutory retirement age of 65. This situation will be unsustainable in the future, in view of the potential shortage of labour," Lindqvist-Virtanen claims, continuing that, in her opinion, the average retirement age should be at least 61 if the situation is to remain tenable in the future.

"Finns are still sticking to attitudes that prevailed in the 1970s, when the people who had experienced the hardships of the war wanted to retire as early as possible. That became the commonly accepted practice, which many continue to support, although life in general, and working conditions in particular, are better and people now live longer.  It is time to readopt the earlier ideal that everyone has the right and the obligation to work as long aspossible," she says.

Riitta Viitala, Deputy Head of the Department for Social and Health Services at the Ministry of Social Affairs and Health, agrees with Lindqvist-Virtanen. The comprehensive National Programme on Ageing Workers also aims at changing popular attitudes. "Implemented jointly with the Ministry of Education, this project supports measures whereby employers can motivate their employees to stay at work until retirement age. A common goal links this programme with two projects launched previously, Fitness at All Ages and Lifelong Learning," Viitala states.

The National Programme on Ageing Workers aims primarily at making corporate management aware of the value of ageing workers as a labour resource. "The massive unemployed experienced in the early 1990s, and the changes in working methods and conditions, all contributed to the view that ageing workers are aburden. All sorts of schemes were invented with a view to getting rid of ageing workers. In consequence, ageing workers' experience and skills were belittled. We cannot afford to act that way any longer, especially as the baby boom generation is approaching retirement age," she continues. Although that situation should still be some ten years off, Viitala believes that the efforts taken now to change attitudes are not premature. 

"Many companies are already aware of the situation, and concrete measures are being taken to bridge the gap in knowledge and skills between young and ageing workers. If these measures succeed on a wide front, the situation will be under control, despite the fact that changing an attitude is always a slow process," she concludes.

According to Lindqvist-Virtanen, a change in attitude can be achieved through the success of certain corporate model projects. "Training or an occupational health service in the long term can be the means for companies to improve the output of their ageing workers. Good results can often be proved with plain figures," she says.

Viitala emphasises that the programme does not aim solely at increasing the efficiency of the ageing workers. "People are different. They do not all have the same stamina. That is why flexible, individual solutions will still be necessary, whether various pension schemes or work-related arrangements. The latter alternative does, however, call for a new kind of employment culture; one that accepts the delegation of easier or less strenuous tasks to ageing workers without involving the attachment of any stigma."

*Source: An attitude survey carried out by Leijona, the life insurance company that is a subsidiary of Postipankki.

Translated by Sheryl Hinkkanen

Originally published in Socius 1-1998, the magazine of Ministry of Social Affairs and Health

Let's put age-related resources to work: Fifty-year-old Acts Differently from a Twenty-year-old

Helsinki (10.07.1998 - Tiina Huokuna) The large age classes are a large question mark on the labour market.  We'll all face problems unless the large age classes can be encouraged to stay active in the workforce longer, and thriving on the job.

At the present time, only mini-sized age classes are coming on to the labour market.  Their numbers aren't enough to replace the massive exit of labour from the workforce.

There is good reason to want to keep people in their fifties active members of the labour market. Firstly, they are the country's first whole age class to have such a good level of education. Keeping the large age classes in the workforce also has an impact on the national economy. The pension system simply cannot flexibly accommodate the simultaneous early exit from the workforce of so many people. 

One critical point will be reached a couple of years from now. By the year 2000, the population between 50 and 64 years of age will have risen by 170,000 people while the number of people 24 to 49 years of age will have fallen by 150,000. During the five-year span ending in 2000, more Finns will pass their 50th birthday than the nationals of any other country in the world, relative to the population. These are facts we must live with and adapt to.

The Finnish Institute of Occupational Health has presented another side to the situation. Ageing workers 45 years old or over have strong points too, which only need to be brought to the fore. A feature becoming increasingly apparent on the labour market is ageing workers' need for individually-tailored solutions. Professor Juhani Ilmarinen of the Institute stresses the folly of assigning 25-year-olds and 50-year-olds the same work.

Professor Ilmarinen emphasises that management by age is neither a bag of tricks nor a complex structure involving major investments. "Management by age is a cheap solution.  All it requires is that people making decisions adjust their thinking, adopt new values and change their attitudes. In the past, too, a good supervisor has striven to find individual solutions - an effort not made by a poor supervisor."

"Good leadership has always been a natural talent based in leadership genes and reinforced largely during childhood and youth. If the right tendencies are lacking, no amount of book learning and courses can make the person into a leader. Our studies indicate that slightly under one in four has naturalleadership tendencies," Ilmarinen says.

Ilmarinen shows curves, compiled at the Institute, which illustrate the principal threats facing Finnish working life.  The disproportion is clear; the large age classes are truly large, the younger age classes small in comparison. There is a real need for the National Programme on Ageing Workers to act swiftly, as a high proportion of the large age classes is already in their fifties.

"It takes years to train young people for new jobs. It is thus faster, cheaper, more humane and more sensible to improve the environment in which ageing people work," Ilmarinen points out.

He is far from discouraged by the situation. Management by age offers one promising approach for dealing with these issues. Job content can be developed so as to be better suited to ageing workers.

Ilmarinen continues: "Steps should be taken to keep individuals' mental, physical and social functional capacity as good as possible.  This is one important part of the picture. Another factor, and by no means the least important, is up-dating professional skills.  We at the Finnish Institute of Occupational Health believe that if matters are handled in the right way, people will be able to continue working until the current statutory retirement age of 65, in the future probably even beyond their 65th birthday."

Youth is prized in Finnish society all too uncritically. In working life, this uncritical admiration is reflected in employers' desire to hire young, well-educated people with a little experience. In many fields, someone who has reached the age of 40 is already a bit too old - unless the person happens to be a guru in the field concerned.

"Young people have their own strong points, but so do ageing workers over 50. Age discrimination is being countered, for instance, by making the employment of older people as economically attractive as the employment of young people," Ilmarinen explains.

Skills should be kept up-to-date all the time.  Many ageing workers encounter difficulties in meeting the demands of the information society. Nerves are frazzled, for example, by the computer. Lifelong learning at work, however, has come to stay; few can escape this.

Nor are age discrimination and displacement of ageing workers from the labour market a joy to younger people. Instead, a heavier burden is placed on their shoulders.

People elsewhere remain active in working life longer than in Finland. Moreover, the expertise of senior workers is esteemed better in other countries. Finnish working life excludes people unusually early, though according to statistics, Finns are not in any worse shape than others - Danes, for instance.

A national weekly magazine, Suomen Kuvalehti, recently featured an article on the challenges to working life presented by ageing workers, and Ilmarinen received many revealing phone calls from senior managers.

"For some reason, Finnish companies think that once a director has retired, his or her expertise is no longer useful. The younger people take it as a question of honour to manage without the retired director. Yet it's clear that many directors are still sharp at 75 years of age, and would be glad to perform some of the tasks included in their former career. Naturally these seniors would have to push themselves forward to be included, and this isn't the Finnish way of proceeding," Ilmarinen says.

(Published originally in Socius Finland 1/1998)

Trends of Social Security in Finland in 1997-98:
Long-term Benefit Dependence on the Rise

(05.07.1998) The economic and social effects of the recession have left a long-lasting mark on Finnish society, despite the fact that prerequisites for economic growth are good.  The greatest cause for concern is the slow decline in long-term unemployment. 

There is increasing danger that Finland will be split into two groups; citizens who are well off and those in a bad way.  Prolonged dependence on social security is even increasing. Recipients of unemployment benefit remain on numerous. The number of people living on income support has not fallen appreciably; in addition, the period covered by income support was extended in 1996.  These were among the findings disclosed in a report, "Trends of Social Security in Finland in 1997-98", compiled by the Ministry of Social Affairs and Health and released on December 17, 1997.

This is the second report on trends in social security to be issued by the Ministry.  The report gives as up-to-date as possible a picture of changes in social security, and describes the effects these changes have on social security.  The report also assesses these considerations in relation to various suggested reforms. The effects of the State budget proposal for 1998 and other anticipated factors are also evaluated in the report.

Slow recovery, both from recession and from massive unemployment, is characteristic of other European countries, too. Unemployment has the greatest effect on workers with the lowest level of education and training and on workers with little or outdated vocational skill. Income differentials are growing in many industrialised nations. In Great Britain and the USA, for instance, unemployment has meant more low-paid jobs and rising income differentials. Indications of a rise in income differentials are also discernible in Finland.

In Denmark, social security has been re-evaluated through what is called an activation policy; this has not led to any marked reduction in the coverage of social security, and the level of benefit has remained reasonable. It is now time to contemplate what we can learn from the solutions devised in other countries, and how these can be applied indrawing policy lines for social welfare in Finland.

Largely on account of social policy, Finland survived the deep recession of the early '90s without any major social disruption. For most citizens the worst is over, and their need for benefit has decreased.  Despite cuts made in social security,income transfers and social services have effectively prevented poverty and social exclusion.  Taxation, however, had to be tightened to a level that is high by international standards, and the public debt grew quickly. Furthermore, the recession revealed structural problems in social security.

The fact that hundreds of thousands of people are long-term recipients of social security benefits inevitably raises questions concerning the coverage and level of social security. Issues relating to the individual's responsibility, society's responsibility, and rights and obligations are also involved. As a result of other changes in working life apart from unemployment - i.e.increases in fixed-term, temporary and part-time jobs - many working-aged people are in need of social security benefits at least occasionally. Social security benefits originally intended to be temporary (unemployment security) or as the last resort (income support) have become means of ensuring long-term income. For many people, income is made up mainly of a group of social security benefits which supplement each other.  Moreover, there are urban districts in Finland where residents in employment form a minority.

In particular, young people's long-term dependence on social security should be avoided. It is in nobody for life to depend on benefits from an early age. Social security continues to give the wrong signals to ageing workers and to employers, even though pensions and unemployment security have been revised to encourage work and rehabilitation.

Action models promoting employment should be devised for young people and for ageing workers. Income support and other social security related services, as well as the weightings between them, should be developed so that they promote work, study and rehabilitation. Nor is this enough. Business cycles, economic policy, taxation and changes on the labour market affect the population's well-being as well as social policy. Encouragement to work and dismantling of income traps also require that taxation and funding of social security are constructed in a way that motivates employers to hire people.

Social expenditure rose dramatically in the early '90s, more than half of the increase stemming from unemployment.  The rise would have been even sharper without the amendments made to social security. In 1992, municipalities launched measures to cut the costs of social welfare and health care services. The State handed down several decisions on savings, which meant lower levels of social benefits. Proportionally, the greatest cuts were made first in the field of health care, but in the mid-90s the cuts focused on expenditure for unemployment benefits and on allowances for families with children.

At 48.2 per cent - 2.1 percentage points higher than in the previous year - Finland's tax rate in 1996 was the third highest of all OECD countries. The large public debt and high tax rate will restrict funding for social expenditure in the coming years.

The tax bite, or the difference between the worker's net income and the total costs arising from employing the worker, has increased markedly in the past few years. The big tax bite skews the national economy and weakens economic efficiency. The negative effects of taxation on the labour market are further worsened if value-added tax is also taken into account. Finland's value-added tax rate, too, is above the EU average.

During the recession, the scope of value-added taxation was expanded to include the services sector, and the rate set was fairly high. This may have affected demand for services, thereby weakening the ability of service providers to employ people. In Finland, private services account for relatively low proportions of total output and employment.

Pressure to reduce the tax bite has been mounting. In order to promote employment, both general and targeted tax cuts have been proposed. Such cuts could affect income taxation, social insurance fees or value-added taxation. Cutting the tax bite by reducing the State's tax revenues and social insurance fees would further hamper the funding of social security. With the present funding structure, the high unemployment and pension costs necessitate high social insurance fees. So in the near future it will be necessary to achieve a balance between conflicting objectives.

Traps also have a negative bearing on the entire national economy. If increasing the amount of work done does not result in economic gain, the labour supply shrinks. A smaller supply of labour tends to mean rises in wages, which in turn cut demand for labour. Traps and imbalance on the labour market may mean increased tax evasion and growth in the grey labour market. This, too, affects the funding of social security.

The OECD Job Study points out that creation of low-paying jobs should not be promoted by means of tax reliefs or employment support measures, unless there is total conviction that major social advantages will be achieved. The drawbacks can be minimised by arranging further education and training forworkers. In the best case, low-paying jobs would provide the necessary experience and would give young workers a stepping stone to better jobs. Low-paying sectors, however, are "poor" work alternatives if those involved remain in that area of employment for along time. According to the OECD Job Study, there are indications that people do indeed get trapped in this way. Many countries have worker groups that have become caught in a vicious circle of low-paying jobs and unemployment.

Expansion of education insurance is currently being prepared in Finland. It is in the interest of both employers and society to support lifelong learning which augments workers' professional skills and competence and increases the ability of the labour force to adapt to changes in working life.

Because the effects of education and training can largely be seen only in the long term, there is also a need for measures having more immediate effects. Various targeted tax cuts have been widely discussed in the OECD, in the EU and in Finland. Cuts in taxes and fees are thought to promote employment most effectively if they affect the cost of less-skilled labour.

It has been suggested that low pay should be offset by benefits that improve low-paid workers' livelihood.  In order to receive this benefit, claimants would have to be working.  The benefit level would fall as earnings rise. Such a scheme could prove very costly.  If the adoption of wage-related benefits led to an increase in the supply of labour for low-paying jobs, the outcome might be pressure to reduce the wages of low-paid work still further.

The issue of cuts in social insurance fees has been contemplated in Finland in various connections. Such cuts would not necessarily lead to lower employment costs and positive effects on employment.  The outcome ultimately depends on wage flexibility in the demand and supply of work.  Studies indicate that, in the long term, it doesn't matter whether fees are paid by employers or by workers.  If insurance fees are transferred from employers to workers, the resulting pressure to increase wages can quickly nullify the momentary drop in employment costs. Incontrast, fees paid by workers and by those insured increase awareness of their own liability and make social insurance more transparent, thus perhaps having a positive impact on employment.

If the aim is to improve employment substantially by means of cuts in social insurance fees, the cuts need to be sizeable.  Minor changes have little effect.

New gradation alternatives would be most beneficial to very small enterprises with a total payroll expenditure of under a million Finnish marks (1 U.S.dollar is 5,5 Finnish Marks). A less attractive feature of such gradation alternatives is that the fees payable by slightly larger companies would be considerably higher than at present. The fees payable by the very largest companies would rise only slightly and in some cases they might even fall. This, in turn, is self-defeating if the aim is to favour small companies in low-paying sectors.

Cutting employers' social insurance fees, however, can be justified on the grounds that some of the fees are not directly linked with work. For instance, the higher national pension contribution paid by the employer, the smaller  the national pension received by the wage-earner. Only fees for earnings-related benefits should be collected on the basis of wages; basic security benefit should be funded through the State's tax revenues.

Numbers of municipal social welfare and health care personnel took an upward turn in 1996, when municipalities and municipal federations employed a total of 215,900 professionals for such work. One reason for the increase in personnel is expansion of the right to daycare for children, though in fact, some staff increases were recorded in all segments of social welfare and healthcare.

In 1996, permanent post-holders came to 154,300 people, a rise of 1,300 (1%) on the previous year. The percentage of permanent employees of  the entire personnel continued to decline, and is now only 71 per cent. There was a radical increase (41%) in fixed-term personnel in both the social welfare sector and the health care sector, their number totalling 5,600 people. Half of the personnel growth is explained by the increase in staff members with fixed-term contracts.

It appears that, to an appreciable extent, permanent job tasks are being carried out by fixed-term personnel and people on employment schemes. Their high proportion impairs the quality of social welfare and health care services, and weakens staff members' motivation and opportunities for systematic development of their work and of their work community. Guidance for new workers consumes the energy of permanent employees and lessens the time they have to spend with patients and clients. There is less opportunity to develop permanent client relationships. In the long term this is likely to increase the cost of services and to have a detrimental effect on the health and well-being of staff members and the population at large. Further, unemployment among social-welfare and health-care personnel increases unemployment expenditure.

The age structure of social welfare and health care personnel has a concentration of middle-aged staff members, the proportion of young personnel being lower than average.  For this reason, too, municipalities should wake up to the need of social welfare and health care personnel for early rehabilitation and supplementary education and training, and should ensure the availability of sufficient permanent staff.

Social problems have become more widespread and problematic in the '90s. It is therefore important to develop social welfare work. Income difficulties, child protection, mobilizing the unemployed, reducing intoxicant abuse, and promoting the well-being and safety of communities in relation to these issues all require that sufficient resources are available for social welfarework. The acceptable minimum requirement could be one social welfare worker per 2,000 residents.

Translated by Sheryl Hinkkanen

(Published originally in Socius Finland 1/1998)