The government led by Prime Minister Petteri Orpo (NCP) has said it will investigate ways to make more people eligible for income-linked unemployment benefits, regardless of whether or not they are members of an unemployment insurance fund.
Finland pays unemployment benefit linked to previous salary, so long as the claimant is a member of, and has paid contributions to, an unemployment fund.
Most of these funds are linked to trades unions, and have historically been a major motivating factor in attracting new members.
Earlier attempts to agree changes to income-linked benefits have foundered on the opposition of labour market organisations.
Yle has discovered that the leadership of at least one influential trade union thinks that it is time for unions to stop operating unemployment funds and focus on core activities: namely, advancing members' interests.
Although unemployment funds can require members to work in a certain sector, they cannot demand members also join a union.
At present only fund members are eligible for income-linked benefits. Some have advocated to change that because all workers pay contributions towards unemployment insurance, not just those in funds.
This expansion has been opposed by the Confederation of Finnish Industries, EK, but it changed its mind in 2020. At that point unions accused EK of "pulling the rug" from under them.
The Federation of Finnish Enterprises has also recommended that employers offer membership of YTK, the fund that is not linked to a trade union, as a perk.
YTK has consistently increased its levels of membership year-on-year, and at the same time reduced membership of trade union-linked funds.
The predecessor of the YTK fund was founded in 1991, and was based on close ties with employer organisations, although there was no official link.
Employers have found it problematic that fund membership can also promote union membership to their employees.
And the same works in reverse: if there was no need to join a fund to get the security of income-linked unemployment benefits, people might be less likely to want to join a union.
Two million members of unemployment funds
The rate of trade union membership in Finland started to spike after the current system of unemployment funds was introduced in the 1960s.
The Finnish Financial Advisory Authority says that at the end of 2023 there were around two million members of unemployment funds.
Of those, some 1.4 million people belonged to trade union-linked funds. That number includes some 105,000 people who do not also belong to a trade union.
Some half a million people, meanwhile, are members of the YTK fund. That figure has grown as the numbers of people in union-linked funds has fallen.
The number of unemployment funds has fallen and many have merged in recent years. For example the Open Unemployment Fund, or A-Kassa, was born in 2022 when the funds for the industrial and construction sectors merged with the Finka fund.
Prime Minister Petteri Orpo's National Coalition Party has pushed for universal entitlement to income-linked benefits, but has faced opposition and questions over the technicalities.
For example the Left Alliance has pushed for compulsory membership of unemployment funds. Traditionally parties on the left have been reluctant to weaken the role of unemployment funds because they feared that could weaken the position of trades unions.
Government looks at models and costs
The Orpo government is producing a report on the different alternatives available to the current model of unemployment benefit provision.
Employment Minister Arto Satonen (NCP) is in charge of the project. The report will map out the pros and cons of different models that could make the benefits available to non-members of funds.
"The idea is also to show the different funding options for the universal model, and evaluate its impact on employment and the public finances," said Marjaana Maisonlahti of the Ministry for Social Affairs and Health.
Part of the work is evaluating different alternatives for implementation, that is who would operate the system of universal income-linked benefits.
Both employers' and employees' groups will contribute to the report, which will also draw on previous work on the topic.
There was a report on the issue by the Juha Sipilä (Cen) government in 2018, which recommended three different methods of solving the problem.
The first option would make basic daily unemployment benefits income-linked, but leave the unemployment fund system unchanged.
The second option would be to make membership of a fund compulsory, broadening the role of the funds significantly.
And the third option would be a broader shift: moving income-linked benefits to the Social Insurance Institution Kela to administrate, and winding down the unemployment fund system.
Report due in spring
Maisonlahti of the Ministry for Health and Social Affairs says that she could not say whether the report might take a view on the winding down of the current system of unemployment funds.
"Work [on the report] is ongoing," said Maisonlahti.
It is no easy task. If the unemployment funds' role is diminished, that could annoy the unions.
They would then have to convince members that their membership fees were worth paying even without the fund.
The Federation of Finnish Enterprises' survey in the summer suggested that income-linked benefits remain an important reason many people belong to unions.
Unions' work in safeguarding rights at work, negotiating terms and conditions, or for example paying strike pay could seem like more distant benefits than the promise of a higher rate of unemployment benefit should the need arise.
The report is due to be submitted to government in the spring.
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