When you lose your job in Finland, you are eligible for unemployment benefits set as a percentage of your previous salary — so long as you have been a member of an unemployment fund for the prior 12 months.
Historically this has been a big incentive for people to join trade unions, but since the early 1990s more and more people have joined unaffiliated unemployment funds like YTK, which now has more than half a million members.
This week's show breaks down the issues for employees and employers, and the concerns unions have about declining union membership. Their role is broader than in many other countries, according to union officials.
"There is no law on minimum wages in Finland," said Hildur Boldt from service sector union Pam when asked about falling rates of union membership. "So the kind of pay rise everybody gets, it's because trade unions negotiated them."
That is a powerful argument for some trade union members as unions seek a 10 percent pay rise to compensate for lost purchasing power after years of high inflation in Finland.
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Nick Walters, a grant-writing specialist and union member, says that collective action is his main motivation for joining a union.
"I know that I could rely on legal and career services if I would ever need them from my trade union," says Walters. "However, even though I don't think I would particularly need them, I'm a member because I want to think of the collective movement of trade unions and how my membership helps other people."
That's a common view among people on the left of politics, and Walters is active in the Left Alliance. But the whole system could be set for a shakeup as the current right-wing government explores options to change it.
At present benefits are mostly funded by the state and the compulsory unemployment insurance contributions, with just 5.7 percent of the cost coming from unemployment funds themselves.
Fit for purpose?
The system as it stands seems needlessly complicated to Andrew Baxter, a British IT Director who is an YTK member.
"I joined YTK so I had access to income-related benefits," says Baxter. "So YTK covers the basics, and I also take the additional legal cover. I felt that other unions were quite expensive in comparison. So YTK is a little bit like Ryanair in that you get the basics and then if you want other services you can buy them separately."
"So you're just taking a base service to make sure you can access the income-related benefits. I feel like the current system is not really fit for purpose. Everyone pays into this unemployment pool of money, but you're forced to join one of these YTK or trade unions in order to access the money, so I think that needs changing in the future."
That is a view that is gaining traction in politics and among business lobbyists. One lobby group is looking to encourage employers to pay employees' contributions to an unaffiliated fund, in what it says is an effort to start a conversation.
"The main purpose is to raise discussion, because most employees are not aware of how the unemployment benefits are actually funded in Finland," said Albert Mäkelä of Suomen Yrittäjät, a business lobby.
The system remains intact for now, however, so whether you choose an unaffiliated unemployment fund or one linked to a trade union, it makes sense to join something and avoid the mistake one professor called "the most stupid thing you can do in Finland".
Join the conversation!
Egan Richardson and Zena Iovino presented this episode of All Points North. The sound engineer was Joonatan Kotila.
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