Muddled un­employ­ment

Topics

• Lay-off
• Unemployment

There has been lively public debate about the unemployment situation in Finland. There is no consensus on whether the unemployment situation is normal, bad, or very bad. The situation is complicated by numerous legislative changes.

Worrying develop­ments

There has been lively public debate about the unemployment situation in Finland. At the end of September, Statistics Finland published the unemployment figures for August. The unemployment rate had risen to ten percent. According to Statistics Finland, no other period since the labor force survey began in 2009 has seen such a high unemployment rate.

Many economists commented on the Statistics Finland publication as soon as it was released. There was great concern, and little hope for improvement in the situation. Once the figures had been digested, the comments became even more gloomy. There was particular talk of the rise in long-term unemployment and the growing proportion of young people in it.

Perhaps not after all

A representative of the Ministry of Finance soon joined the discussion, arguing that claims of an unemployment crisis had been exaggerated. The employment situation had not deteriorated to the same extent, and there had been no increase in the number of benefit recipients. The deterioration in unemployment figures was explained in particular by the fact that the number of people participating in employment services has declined. This has led to an increase in the number of unemployed job seekers in the statistics. The message was therefore that the unemployment situation is bad, but not as bad as the statistics suggest

The same interpretation was put forward by labor market researchers who assessed the overall situation based on the number of hours worked. They found that although the unemployment rate has risen, the number of hours worked has not fallen at the same time. In other words, the rise in unemployment has not been caused by a decrease in the amount of work available. The rise in the unemployment rate can therefore be explained in particular by new job seekers, i.e., people coming from outside the labor market. Immigrants were highlighted in particular.

However, the NGOs quickly calculated that only about a quarter of the increase in unemployment can be explained by the unemployment of foreign nationals.

YTK figures positive but confusing

We too have been considering the development of the unemployment situation even before Statistics Finland’s figures for August. Our own unemployment figures differ considerably from those of Statistics Finland. Compared to Statistics Finland’s unemployment rate of 10 percent, our unemployment rate is closer to 6 percent. The statistics calculate the unemployment rate in different ways, so there is a natural difference between them, but now the difference is greater than before and the trends are pointing in different directions.

Unfortunately, the statistics are currently being distorted by numerous legislative changes that affect the payment of earnings-related unemployment benefits. As the YTK unemployment rate depends on payment dates, the legislative changes have a direct impact on the unemployment rate we calculate. In addition, the members of the unemployment fund as a population differ from the population covered by Statistics Finland’s statistics. The members of the unemployment fund are more established wage earners in the labor market. In addition, the age range of the statistics is different.

Asking our members

We also asked our members directly about their unemployment situation.* Typically, our member surveys are answered mainly by unemployed members, so the unemployment rate obtained from the survey is higher than the unemployment rate calculated from payment data. This time, however, there is a noticeable exception in the results, specifically in terms of unemployment rates. The difference between the unemployment rate in the survey and that in the payment data has increased. This suggests that legislative changes reducing contributions have lowered our unemployment rate, even though unemployment among our members has actually increased at the same time.

The situation will even out over time, but at the moment it is somewhat difficult for us to assess changes in unemployment and its future trends. However, our forecast model, which is based on earnings-related allowance payment data prior to the legislative change, does not predict a deterioration in the unemployment situation.

There is no single clear picture

Unemployment is a difficult phenomenon to measure because it does not in itself produce anything that can be measured directly. Unemployment can be assessed through surveys, unemployment benefit payments, and employment service statistics. All of these require some kind of definition of unemployment that is suitable for the method used, and they are not compatible with each other. In itself, the debate over the details is interesting, but not necessarily very fruitful. All of the explanatory models presented certainly capture something of the phenomenon. The situation is now quite difficult: political decision-makers do not have a very clear picture of the current unemployment situation.

*The Member Pulse survey was answered by 17 543 members of the YTK Unemployment Fund. The response period was October 2–7, 2025.

Petja Eklund

Senior Specialist

In my work, I collect and analyze data related to unemployment security and our members. I also participate in the advocacy work of the YTK Unemployment Fund. The goal of my work is to ensure that income security is as effective as possible.