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SY CEO Pentikäinen: “We need fairer and more incentivizing unemployment security”
Mikael Pentikäinen, the CEO of Suomen Yrittäjät, says the new government must overhaul unemployment benefit in at least three ways.
“We need unemployment security that is fairer and provides more incentives than the current one, as well as taking the needs of the modern labour market better into account. We need at least three changes,” Mikael Pentikäinen, the CEO and President of Suomen Yrittäjät, the Finnish SME association, writes in his May Day blog post.
Pentikäinen writes that Finland needs universal income security.
“At present, everybody who is in work funds their income security through unemployment fund contributions, but only fund members benefit from it. This is unfair. Everyone who funds income security must benefit from the system. General income security would provide earnings-linked security against changes regardless of whether somebody is a member of an unemployment fund,” Pentikäinen writes.
“Studies show that many people still think the trade union membership is a requirement for income security, even though that’s not been the case for years,” Pentikäinen continues.
Pentikäinen also calls for shorter, more staggered income security to ensure the system can encourage people to return to the workforce more quickly.
“People on earnings-linked unemployment benefits have the best potential for the labour markets. They have recent work experience. That’s why we need them back at work as soon as possible. Studies show incontrovertibly that people move back into work faster when the end of their unemployment benefits approaches.
“Shorter unemployment security would also benefit businesses’ growth. At present, the labour shortage is stopping or at least slowing down many businesses’ growth.”
Thirdly, Pentikäinen calls for what is known as combination insurance, whereby people could accrue unemployment security simultaneously from work both as a self-employed person and an employee.
“We need a change because more and more people switch back and forth between running a business and salaried employment, and many do both at the same time. This is part of the shifting job landscape. Unemployment security is the only kind of social security that does not recognize this.”
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