Timo Harakka: 100,000 people lost benefits in previous government’s ‘active model’

The new government says it is introducing more positive incentives to encourage people to get back into employment.

File picture of Minister for Employment Timo Harakka (SDP) / Credit: Laura Kotila, VNK

Finland’s Minister for Employment Timo Harakka (SDP) says 100,000 unemployed people lost benefits under the previous government’s so-called ‘active model’ of employment.

The scheme, introduced in spring 2018 by Juha Sipila‘s centre right government, quickly cut benefits from unemployed people who didn’t find a job or go on a training course within a short period of time.

The policy was the centrepiece of the Sipilä government’s plan to raise employment levels, but critics described it as a “punishment” tactic that unfairly and indiscriminately targeted unemployed people without considering their personal circumstances.

On Friday, Harakka and his officials unveiled a new report which looked into the outcomes of the active model but found there was no clear-cut effect on employment that could be identified, distinct from normal employment/unemployment patterns.

However, both Harakka and professionals working to help people find jobs say the active model was not an appropriate way to increase employment.

“The conventional wisdom is whenever you cut benefits or the threats of a cut, that will automatically result in more employment. And this was the assumption of quite a few economists and the previous government as well” says Harakka.

“What is clear is more than 100,000 full-time unemployed people lost a part of their benefits because of this model, and it obviously means it was unfair for quite many already vulnerable people” he tells News Now Finland.

File photo of young people / Credit: iStock

Dismantling the previous systems

The current government got to work almost straight away dismantling the active model structures that were put in place.

What they want to bring in instead is “a more positive incentive instead of a negative incentive” for people to get back to work.

“We are adding resources to unemployment services, and what we are concentrating on is a more individual employment services, instead of this unfair and haphazard model. We want to provide a personalised, individual plan” explains Harakka.

There are still penalties for someone who could work, who has access to a new range of employment services, but doesn’t stick to their individually-tailored plan to get back to employment.

Harakka stresses that this is all down to personal responsibility on the part of the job seeker.

“If you deviate from that plan, with all these services available, obviously there needs to be some kind of sanction. But that is something that the individual himself or herself is entirely responsible” he says.

The minister says tripartite talks between the government, unions, and the employers’ federation are going well to reach agreement on bringing in the new structures.