Employers Systematically Reduce Older Folk

The present Finnish government has been talking a lot about the Employment Rate – a percentage that describes the number of employed people between the ages of 15 and 64 years relative to the total population between the same ages. 

The government’s stated target is 75% by the end of the election period, and the number is currently around 73%. 

Talking about percentages does not disclose the real numbers, nor do voters and tax payers get a good picture of what the numbers mean.

The reality is that some 800 000 people are either not looking for work, are unemployed, or are under-employed. That is a huge number of people between the ages of 15 and 64 years who are not paying any or very little taxes. We need these taxes to pay for our excellent welfare system. 

It is fairly simple to see that Finland needs an employment rate of around 80% to keep the economy on a steady course.

Is it really that hard to get 10% to 20% of these 800 000 people into paying work? Surely that should not be an impossible task.

Your correspondent was surprised to read that there has been a huge collapse in the economic activity rate for working age men in the UK, which has gone completely unnoticed.

Reports from the UK Government recently announced an all-time record in the UK employment rate of almost 77% during the fourth quarter of 2019 are wholly misleading. 

The percentage increase has been mainly due to continued recovery back to pre-recession participation rates, an increase in female employment (primarily due to their later retirement) and seasonal adjustments. The “record highs” for new jobs result from an increase in the UK working population and not a sign of any improved economic health. What employment growth there has been owes more to a decline in wage inflation – down from 4% in Q2 2019 to 2.8% in Q4 2019.

But these figures hide, is a serious problem concerning economic inactivity rates for men aged 16-64. Back in Q1 1971 this was just 4.9%, then progressively it rose to 23.6% by Q1 2010 – after which it has largely levelled off. Men are losing out, whilst women are reducing their inactivity rates. Whether these two trends are linked is open to debate, but should not be ignored.

In Finland the same figures on employment do not tell the same type of story, men have been employed at around the same level over the past decades while more women have joined the work-force – and that is good. That means that the Employment Rate looks like it has got steadily better after the 2008 financial crisis, but at a much slower rate than in the UK.

However, a deeper look at the figures reveals a bad situation that employers seem to be exploiting systematically. Once a worker passes the magic age of 55 years the unemployment/non-active numbers surge dramatically. Early retirement does not explain the big jump from 66 000 to 230 000 of older folk who leave or are discarded from the work force. ”


Given that the retirement age is still low in Finland at around 64 years, you would expect that people would stay at their place of work until then to secure the highest possible pension. 

This situation has been repeated year after year since 1997, so it looks like politicians have not started to address this question seriously. Most older workers are still very fit and healthy. They have a wealth of experience working with customers and with colleagues. They may not be the most skilful with websites but when guess who does not have child care problems, does not go on sick leave with a runny nose? Older workers are worth their weight in gold – they have perspective and experience, they are normally good with clients and know how to get stuff done.

But the opposite seems to be happening, and according to anecdotal evidence, many say that it is more common for people to be “invited to leave” and getting a new job is more difficult that getting an honest answer from some of our politicians.


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