Finland’s shrinking working-age population a concern for experts

Finland should step up its efforts to promote employment-based immigration, views Roger Wessman, an economist at Bastiat Consulting.

A growing number of experts have expressed their concerns about the shrinking working-age population in Finland - reported helsinkitimes.

Juhana Brotherus, the chief economist at the Mortgage Society of Finland (Hypo), on Friday stated in an economic review that the decreasing working-age population is making it more difficult for businesses to find new employees and driving up the demands of trade unions for wage hikes.

“The demands for higher wage hikes have already been stepped up. The round of union-specific talks this autumn could wipe out the growth projections for the year in addition to the relatively positive legacy of the competitiveness pact,” he wrote.

Finland had a working-age population of almost 3,300,000 – equivalent to 60 per cent of the entire population – at the end of 2016, according to Statistics Finland. The number of working-age people is projected to decrease by well over 100,000 by 2030.

Roger Wessman, an economist at Bastiat Consulting, warned that the demographic development could thrust the country into a downward spiral. The unfavourable age structure, he pointed out, will force an ever-smaller number of earners to cover the costs of the welfare system, thus making the country a less attractive alternative for people looking for employment opportunities abroad.

One possible solution is to promote employment-based immigration, according to Wessman.

“In Germany, the share of working-age people has begun to grow in recent years, even though also the Germans are ageing at a rapid rate. Accelerating employment-based immigration is the primary underlying factor. Foreign workers’ share of the labour force has grown rapidly in recent years. Today, foreigners represent a tenth of all employees in Germany,” he highlighted in his blog .

Finland should take actionto develop itself into a similarly attractive destination for the increasingly mobile global workforce.

Wessman estimated that the relatively low levels of employment-based immigration in Finland are attributable mainly to the country's remote location and language barrier. Such obstacles, however, should only place further emphasis on the importance of efforts to attract employees from all around the world.

A similar argument was made by Olli-Pekka Paasivirta, the chairperson of the Federation of Green Youth and Students in Turku.

“Finnish employees are not superior to foreign ones. Employment creates prosperity and well-being, and that is in the best interests of all of us. The labour input of someone who has moved here from abroad is just as important as that of a Finn. We should be pleased if someone moves toFinland and contributes to funding our societal functions,” he stated in a blog on Puheenvuoro .

He pointed out that the decreasing number of working-age people is eroding the funding base of the welfare society and is making it all but impossible totake advantage of certain growth opportunities.

“Promoting employment-based immigration is a great way to overcome challenges arising from population ageing. Employment-based immigration can be promoted by political decisions, but ultimately people will move to Finland of their own free will. Finland must become an attractive country to work and build a new life. Discriminatory attitudes towards people of foreign backgrounds are certainly one factor reducing the appeal of Finland,” commented Paasivirta.

Aleksi Teivainen – HT

Photo: Anni Reenpää – Lehtikuva

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