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06.06.2025 15:38

Cuts in social security and part-time work causes poverty among the employed

Alarming research results on poverty among the employed in Finland and a warning example from the UK were presented at a PAM seminar.

Poverty among the employed raises concerns in Finland. At the end of March, PAM organized a seminar where researchers from Finland and the UK discussed the topic.

According to surveys conducted by PAM among its members, workers are now more concerned about their financial situation than ever before during the fourteen-year history of the survey. According to Professor Mikko Jakonen at the University of Eastern Finland, there is a certain division of the labour market and working life in Finland that is evident.

– A two-tier labour market is a fact. The position of the upper middle class is strengthened while the lower middle class falls into a position that it is not used to. 

Full hours – the most effective cure

What is the cause of poverty among the employed? Atypical employment and low -paid work, among other things. Involuntary part-time work is common in the service sector. There is not full-time employment available, although many would like to have it.

Often, part-time workers complement their livelihood with social security, such as adjusted unemployment benefit and housing allowance. However, the Orpo-Purra government has abolished the protection part of the unemployment security and weakened the housing allowance.

– Especially single women’s position is difficult. The most effective measure to reduce poverty among the employed is to offer full-time work with a reasonable salary. The most important parts of social security are housing allowance and adjusted unemployment benefit – they are flexible, Jakonen noted at the seminar.

One consequence of poverty is food insecurity. According to Maijaliisa Erkkola, professor at the University of Helsinki, a third of employees in the service sector had experienced serious food insecurity in 2019. During the pandemic, the situation became a little better, somewhat unexpected, but now it has returned to the same bad situation as before.

– We should be able to guarantee an income that covers sufficient nutrition and other basic supplies in life. The right to food is a fundamental right that does not mean food assistance, said Erkkola at the seminar.

The government’s half-time review was no help

According to the government, the half-time review was at the same time a negotiation on economic growth. The situation for employees affected by drastic spending cuts did not get any better at all. For example, employers do not have a stronger obligation to offer full-time work and the protection parts have not been reintroduced.

Trade unions are exposed to attacks from different directions, and most recently the government decided to abolish the right to tax deductions for union member fees.

Instead of improving the situation for low-income earners, the government decided on significant tax cuts for those who earn the most and for companies. Taxation for those who earn more than EUR 10,000 a month will decrease by thousands of euros per year. At the same time, the taxation of low-income earners will decrease by just over a hundred euros per year.

The government has repeatedly said that it is looking for to increase full-time employment with these cuts, but so far the unemployment has only increased by tens of thousands of people during this government period.

At the seminar, PAM chair Annika Rönni-Sällinen invited politicians who decide on social security to make a choice.

– Part-time work causes poverty, so therefore we have to make a choice. Do we want people to get by with their salary and have enough working hours or do we want to supplement our income with social benefits?

Professor Jo MCBride from Durham University spoke at the seminar.

UK viewed as a warning sign

The seminar’s most remarkable presentation was given by Professor Jo McBride at Durham University. McBride has participated in research on the working poor in northeastern England.

The research has shown that workers can have up to seven jobs at the same time. Despite multiple jobs, the workers were poor, even though they did not want to admit it in interviews.

– The most common causes of working poor are low pay, atypical work and zero-hour contracts, said McBride.

For example, a worker who participated in the study had two different cleaning jobs, a job in the commerce sector and one in the restaurant industry. Despite four jobs, the person lived in a camper.

The situation in Finland is not as bleak as in the UK where the Conservative Party has weakened the welfare state since the 1980s and Margaret Thatcher‘s times. The safety net in the society is weaker and there is more homelessness than in Finland.

Trade unions can affect the position of workers through collective agreements, but social security and other legislation lies in the hands of politicians.

– Politics is about values. Economic growth alone is not enough; we need to think about how to share the cake and how everyone can live a dignified life, commented Annika Rönni-Sällinen at the seminar.

Text: Pauli Unkuri, Photos: Pauli Unkuri, Travers Lewis / Shutterstock.com

Keywords:

income politics

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