YTK Transparent: Who Founded YTK?

Topics

• Income security
• YTK

The YTK Unemployment Fund was established in the midst of the recession of the early 1990s, when unemployment rose to unprecedented levels. At that time, the only practical way to qualify for earnings-related unemployment benefits was to join a sector-specific union and its fund. As a result, there were wage earners in Finland – especially in the private sector and at small businesses – who were not unionized and therefore lacked earnings-based security. To fill this gap, the YTK Unemployment Fund was founded in Loimaa in 1991 and began operations at the start of 1992. It was founded by an entrepreneur from Loimaa, not by an employers’ organization. From the very beginning, the idea was to give every wage earner – regardless of industry or union membership – the opportunity to gain access to earnings-related unemployment benefits.

One interesting fact that illustrates YTK’s impact on Finnish society is that while union membership has declined significantly since the 1990s, the proportion of wage earners belonging to the unemployment fund has remained virtually unchanged. Nearly 80 percent of wage earners are still members of a fund. In practice, this discrepancy can be explained by the growth in YTK’s membership. In other words, income security coverage has remained high in Finland precisely because the YTK has existed. Without the YTK, there would be hundreds of thousands more wage earners outside the unemployment funds today.

It has been 35 years since the YTK Unemployment Fund was established, and during that time, the Unemployment Fund Act governing its operations has also changed. Each change has introduced new requirements for the funds’ operations, transforming YTK into a completely different organization than it was when it was founded.

The requirements for the operations of unemployment funds today are in a completely different league than they were in 1992. For example, the reliability, suitability, and professional competence of the fund’s management and board members are now regulated by law, and regulations have tightened across the board.

YTK about today

Today, YTK Unemployment Insurance Fund is Finland’s largest unemployment fund. We provide unemployment insurance for approximately one in four Finnish wage earners. The fund’s operations are governed by the same legislation and supervised by the same Financial Supervisory Authority as all other funds.

The amount of the earnings-related daily allowance is determined by law, not by the fund’s preferences: it is the same regardless of which fund you belong to. And all employees and employers contribute to the funding of income security through statutory contributions, in addition to which members pay their own fund membership fees. So no one is living off anyone else when it comes to their own income security.

It’s equally important to be honest about what YTK is not. We are not a labor union, nor do we negotiate collective bargaining agreements. That is the work of the unions, and that work has its own important place in Finland. However, by law, membership in a fund and membership in a union are two different things, and everyone makes their own choice based on their own circumstances. Our job is not to tell others what they should choose, but to do our own work so well that membership proves its worth every day.

The claim of “living off others” is usually directed specifically at collective bargaining agreements: unions negotiate the terms, and through universal applicability, they apply to everyone. Universal applicability, however, is a choice made by the legislature, not by the YTK or its members. A person who works or is looking for work, and who pays their taxes and statutory contributions, is not living off anyone else simply because they have chosen a different form of security than someone else.

Our members have typically made a voluntary and informed choice. They receive income security and job search assistance from the fund, as well as legal aid, insurance, and other services that support their working life from YTK Worklife. What matters most in everyone’s personal daily life is the effectiveness of the services needed during the ups and downs of working life – not perceptions.

Would you like to learn more about the YTK Unemployment Fund’s responsibilities, history, or, for example, its funding?