Wages and salaries
Cleaner’s wages not enough to pay the rent - situation worst in the Helsinki region
PAM compared the share of wages (average gross earnings for full-time regular working time) spent on housing costs by region in 2015. Graphics: Berry Creative
Almost half of a cleaner’s gross wages goes on rent in the Helsinki metropolitan region, according to a comparison made by PAM. Even though there is a shortage of cleaners in the Helsinki region, where housing is expensive, on average they earn less here than elsewhere in Finland.
Almost half (44.5%) of the gross wages for regular working hours for a cleaner living in the Helsinki region and in full-time employment go on housing. For Finland as a whole, the housing costs of persons in the same occupation eat up 33.7 per cent of their wages.
PAM compared gross wages in private service sectors by region and the share of wages going on rent for a two-room flat of 50 square metres. *)
There is shortage of cleaning workers in the Helsinki region, and rents here are high. So it is surprising that, despite these factors, PAM’s comparison shows that cleaners in the Helsinki region earn less than the average for the country. A cleaner’s gross pay in the Helsinki region is 1859 euros, as against average pay in the country of 1874 euros.
Almost half of cleaners in the Helsinki region have an immigrant background, according to Statistics Finland’s employment statistics. That is more than elsewhere. The question therefore is whether persons with a foreign background are less well placed to ensure that their earnings keep pace.
The regional variations in wages in private service sectors are also explained by remuneration systems, personal pay components, labour turnover and possible tendering procedures.
Waiters in the Helsinki region earn 2270 euros gross, i.e. a bit more than the average for the country. Rents in the Helsinki region take up 36.4 per cent of their gross pay, the average figure elsewhere in the country being 28.1 per cent.
Sales assistants in the Helsinki region earn more than their colleagues on average. Full-time sales assistants earn 181 euros more in gross wages than the rest of the country, which is explained by their having their own pay schedule in the collective agreement for the sector. For full-time sales assistants in the Helsinki region, the share of wages going on rent is 30.9 per cent, whereas for sales assistants in the country as a whole it is 25.3 per cent.
If they are looking for the best ratio of rental expenses to living costs, cleaners, waiters and sales assistants should move to Satakunta. In Satakunta average rents are 476 euro, but wages are not lower. There a cleaner’s rental expenses are 24.8 per cent of gross wages, a waiter’s 21.6 per cent and a sales assistant’s 19.7 per cent.
PAM’s social policy expert Mari Kettunen considers the lack of reasonably priced housing in the Helsinki region and the large cities to be a serious problem. Wages are too low compared to living expenses.
“The increased level of rents and the lack of reasonably priced housing is driving many low-paid people into income difficulties and vulnerability”, says Kettunen.
In October-November PAM studied the opinions of the working-age population on the impacts of housing costs. 81 per cent of working-age people think that regional differences in housing costs are a barrier to the mobility of labour within the country (TNS Kantar).
The high level of rentals also goes to explain why the number of people receiving general housing allowance has increased greatly since 2008. At the end of 2015 a total of around 246,000 households received general housing allowance, and a fifth of them were described as in work.**)
According to Kettunen this shows that wages are not enough to make ends meet.
“The right to a home is a basic right. We need to promote the availability of reasonably priced housing in the Helsinki region and in growth centres, where many service sector professionals are concentrated.”
/12.1. at 14.44 Gross wages for waiters in whole country corrected.
Analysis of wages and rents doesn’t tell the whole truth
*) PAM requested information on wages and rents from Statistics Finland. Wages are average gross earnings for full-time regular working time for 2015 and do not include bonuses or overtime payments for example. Comparing gross wages gives an overly positive picture, because after taxes housing costs would take up an even bigger slice of take-home net pay. Earnings are also for full-time employees, whereas in reality many people in service sectors are part-time. Possible housing subsidies have not been factored into this calculation. The rent data is for flats of 50 square metres.
**) A household is classified as in work if over half of the household’s income comes from wage or company income.