The enhanced unemployment benefit system offered to older workers may make it more difficult to achieve Finland’s employment target, Antti Palola, The chairman of the Finnish Trade Union Confederation (STTK) said on Wednesday.
Palola referred to the so-called “pension tube” (pension tube Finnish), a system that allows older workers who become unemployed to apply for improved unemployment benefits until early retirement, in theory by removing incentives for employers to hire people over the age of 55.
This arrangement is seen as the main reason for the lower employment rate of older workers and is now under threat as the government looks for ways to raise the overall employment rate.
Last month, the government asked labor organizations to come up with measures to increase the employment of older people. The measures must reach at least 10,000 older workers by the end of the decade, according to calculations by the Ministry of Finance.
However, according to Palola, it is difficult to find alternatives to the current benefit structure if the goal is to be achieved.
Palola said he expects a large number of negotiations next month to get people over the age of 55 into jobs. If key organizations do not find a solution by November, the government announced it would take action itself.
The Union is looking for a balanced solution
According to Palola, employers want to get rid of this system.
"This has been very difficult for us. I have received a record number of messages, especially for the over 55-year old woman, with a low-income person concern about the issue," Palola told reporters on Wednesday.
Palola stressed that the negotiations will find out how to strengthen the position of the elderly in working life if the system is scrapped.
The union is looking for a balanced solution and is proposing, among other things, to temporarily eliminate non-wage costs to encourage employers to hire people over 55.
Currently, an unemployed person born in 1961 or later is entitled to daily unemployment benefit at the age of 62 compared to 61.
Source: The Nordic Page