Economy grows – where are the jobs, Minister of Employment Matias Marttinen?

Finland's economy is showing robust growth, outpacing many European counterparts and exceeding 2% expansion this year, according to recent forecasts. However, this economic upswing has not yet translated into a significant decrease in unemployment, which remains stubbornly high.

Statistics Finland reported that in July, there were 20,000 more unemployed individuals compared to the previous year. This disconnect between economic growth and job creation has raised questions, prompting Helsingin Sanomat to ask Minister of Employment Matias Marttinen about the situation.

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Traditionally, the rule of thumb has been that economic growth is transmitted to the labor market with a lag of about 6-12 months. At this point, one can say that economic growth is already so strong that it is only a matter of time before employment turns to growth.

Marttinen explained that traditionally, economic growth takes about six to twelve months to impact the labor market. He expressed confidence that the current strong growth will soon lead to increased employment. The Ministry of Economic Affairs and Employment estimates that employment will begin to rise by the end of the year. He noted that many industrial companies have been operating below full capacity, slowing the transmission of economic recovery into new hiring. However, signs are emerging that growth is reaching the domestic market and the service sector, where job demand could increase more rapidly.

Further supporting this outlook, Marttinen pointed to a significant increase in the turnover of staffing companies over the summer, indicating a rising demand for temporary workers that often precedes permanent hiring. He also addressed concerns about previous years' growth figures, clarifying that while the economy had been growing, it was at a rate below 1%, insufficient to boost employment. The current, stronger growth is therefore particularly encouraging. Despite the positive economic trend, long-term unemployment remains a challenge, with over 17,000 more long-term unemployed in July compared to last year. Marttinen mentioned that decisions on funding for training programs targeting the long-term unemployed are expected soon, including a 20 million euro skills voucher program for additional training.

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It is true that the economy has grown cautiously, but one must also remember that the growth has been less than one percent. It has not yet been enough to pull employment upwards. Therefore, the strong growth seen now is particularly encouraging.