Soste calls for large employers to fund long-term unemployment measures

Finland’s social and health organisations’ umbrella body Soste has proposed a new fund to combat long-term unemployment, with employers of more than 50 people required to help finance it, Yle reports.

Under the proposed model, the Employment Fund, jointly managed by labour market organisations, would take over employment subsidies aimed at employers, including wage subsidies.

Soste’s employment responsibility model treats exclusion from working life as a societal harm comparable to pollution, which employers should compensate for, the organisation said. The responsibility would apply to employers in both the public and private sectors with more than 50 employees.

Employers could meet their responsibility by hiring long-term unemployed people, people with disabilities or those with partial work capacity. They could also subcontract labour from organisations or provide funding to the fund.

Soste specialist Tatu Raitis said similar employer responsibilities for employing special groups are used in one form or another in almost all European Union member states. He said the proposed model would bring Finland into line with a broader European approach.

Under the proposal, the Ministry of Economic Affairs and Employment would provide the fund’s initial capital. It would later contribute based on results, such as reductions in unemployment benefit costs and increases in taxable earnings resulting from services financed by the fund.

Most of the fund’s financing would come from compensatory investments made by employers, Soste said. At present, employment subsidies are financed mainly through central government transfers to municipalities.

Soste said moving the subsidies outside the current transfer system would help protect wage subsidy funding from savings pressures during economic downturns and periods of rising unemployment.

Soste brings together more than 250 social and health organisations, including the Finnish Association of People with Physical Disabilities, Mieli and the Finnish Red Cross. Most of its member organisations represent people with illnesses or disabilities.