Many job seekers know that education does not automatically guarantee employment. Even a highly educated person must compete against many other highly educated people in the hunt for work. This is due to the continued rise in the educational level of the working age population in Finland.
The socio-economic position of job seekers, defined by such variables as wealth, property and the parents’ professional standing, is again defining how well they are able to do in the job market.
“Previous research results clearly prove that a father’s socio-economic position and professional standing define the job opportunities of his offspring. This was the outcome of Professor Jani Erola’s cohort studies done some years ago. The old social divisions have come to light again in our studies, which were based on a longitudinal follow up of the later employment of displaced workers,” says Pertti Koistinen, professor of social policy at the University of Tampere.
Social resources also include such factors as the person’s safety net, for example grandparents who can help with child care, enabling the individual to take a job with a longer commute or unsocial hours. The family background defines how many resources and networks and how much social capital an individual or household has.
The recession that started in 2008 is still influencing the increased unemployment rate today, but it does so in a different way than during the recession at the beginning of the 1990s. At that time, traditional core industries such as forestry and mechanical engineering were hit hard.
The research project “Employment trajectories of displaced workers” analysed the effect of plant downsizing on the career advancement of employees. Using large scale nation-wide employer–employee data gathered by Statistics Finland, it was possible to compare employees’ careers during the recessions of the 1990s and the 2000s. Koistinen was the principal investigator in the study.
The research results provide a positive message about the adaptability of the labour market and its reintegrative capacity to get the displaced workers back to work. “Even though there is a high risk of unemployment in Finland, structural changes follow one after the other and unemployment keeps increasing, the ability of the labour market to reintegrate the unemployed is still quite significant.”
Although those who lost their jobs in the recession of 1992 suffered, the positive signal was that for many, their careers took off again a few years after they were laid off. This was often caused by retraining and the new skills the people learned.
“Women in particular were resourceful and used the opportunity to earn new degrees and find employment in other fields.”
According to Koistinen, some of the improved unemployment statistics were caused by better circumstances. There were more job opportunities at the turn of the millennium than there were in the early to mid-1990s. However, timely employment policy measures also played a role.
“The ‘change security system’ for laid off employees was created because of the experiences gained during the recession in the 1990s. Finland was one of the pioneers in developing proactive means to increase employment rates. If we look at the big picture, even the much maligned education system organised by the public employment services worked well.”
A surprising result also came up in a comparison of who had fared best in the changed situation: was it those who were able to keep their jobs when threatened by dismissals or those who had lost their jobs?
As expected, the employees who were able to continue in the same workplace immediately after the lay-offs were luckier at first. But after a couple of years, the differences in the careers of the two groups diminished. The incomes of those who were dismissed dropped for a while, but they soon rose again to the same level as those who had been able to keep their jobs. Indeed, the incomes of the employees who left the workplaces grew even faster than the incomes of those who were able to retain their posts.
The conclusion from these results is that the labour market should be understood as a process in which all people encounter risky situations.
“The most crucial thing is how people are able to protect themselves from such risks and how social policy measures can help them,” Koistinen states.
He argues that the problem with employment exchange services is that nobody seems to assume full responsibility for supporting the job seekers.
“The public employment services have become a ‘sorting device’, which does not produce services but categorises people into different groups. Those for whom it is hardest to find employment may be referred to further measures elsewhere at NGOs or private companies,” Koistinen says.
“Those who end up in this B category through no fault of their own are in trouble because they cannot get good services, or they are not treated as individuals.”
Koistinen believes that the methods of increasing employment are doomed to fail if democracy is not working. Retraining and continuing education are good measures, but not if they are badly organised and do not fit the job seekers’ needs.
“Of course, what can be considered a positive thing is that people nowadays understand that people can lose their jobs without doing anything wrong and that they may have to spend a long time looking for new jobs,” Koistinen adds.
“This reduces blaming the unemployed and discriminating against them in the job search.”
In large-scale lay-offs, downsizings or other organisational changes in factories, those who lose their jobs can usually benefit from some extra resources on top of the regular employment policy measures. For example, the towns where the lay-offs have occurred may be granted financial aid so that they are better able to manage the structural changes, and the unemployed can be offered tailor-made programmes.
According to Koistinen, people who have lost their jobs in large-scale lay-offs hold better positions politically than the other unemployed. In their case, it is self-evident that the job loss is not caused because they have neglected their duties or for other personal reasons.
“They are portrayed in the media as skilled labour. The fact that you have been laid off from Nokia, for example, is a good advertisement. Other companies have quickly snapped up such job seekers,” Koistinen says.
“Do other job seekers have such advantages? Unfortunately not.”
The “Employment trajectories of displaced workers” project will publish a popular summary report later this year.
Text: Tiina Lankinen
Photograph: Jonne Renvall