The Open Unemployment Fund recorded a significant increase in the number of earnings-related allowance recipients during the first quarter of 2024 compared to the same period last year. Looking at the numbers regionally, the largest increases occurred in Pirkanmaa (72%), Central Ostrobothnia (66%), Kanta-Häme (65%) and South Ostrobothnia (65%) during January–March.
The number of recipients increased a remarkable 42% compared to January–March of the previous year. On a monthly level, the largest increase occurred in January which saw an increase of 55% compared to last year. The number of recipients rose in all regions except for Åland. The Open Unemployment Fund is home to approximately 244,000 members from various industries.
Typical annual fluctuation in the number of recipients of earnings-related allowance sees the numbers remain high from January to March, even taking a slight upward trend until March. After March, the number of recipients starts decreasing towards summer. In the summer months, the number reaches its lowest point and then starts to rise towards the end of the year. In 2023, the increase in the number of recipients at the end of year was considerably steeper than in 2022. In December 2023, the number was 41% higher than in December the previous year.
In the heels of the year-end upward trend, the number of recipients remained high in January 2024, but they have since taken a slight downward turn. So, instead of the usual January–March upward trend, we have seen an unusual decrease this year.
Number of recipients increased by more than 60 percent in several regions
On a regional level, the greatest increases in January–March occurred in Pirkanmaa (72%), Central Ostrobothnia (66%), Kanta-Häme (65%) and South Ostrobothnia (65%). January recipient numbers were considerably higher in all these regions compared to the previous year, seeing an increase of up to 70 to 90 percent. However, by the end of March, the numbers had gone down which evened out the quarterly increase.
The most peculiar development during the reference period took place in South Savo. There, the number of recipients for January was 107% higher than in January last year. However, the number went down during the next two months, ending up 1% lower in March than in March the previous year.
Kainuu (14%), Lapland (20%), North Karelia (25%) and Satakunta (29%) saw the smallest recipient increases during the quarter. In these regions, the year-to-year trend from last year was similar to that of high-growth regions. In other words, the number of recipients grew the most in January in these regions as well and declined in February–March.
What is behind the sharp increase in the number of earnings-related allowance recipients?
The stark increase in the number A-kassa’s earnings-related allowance recipients at the end of 2023 was the result of the declining economic situation in Finland, particularly the struggling construction industry. With the economic recession, unemployment has gone up, and Statistics Finland reported that its trend of the unemployment rate was 7.5% in October 2023. A-kassa members have also seen their unemployment rate go up, starting from autumn last year. There was an increase in lay-offs at the end of last year, which was evident in the larger share of lay-off period daily allowance recipients.
Legislative amendments by Orpo’s Government which enter into force this year affect the conditions of unemployment security, such as the level of earnings-related allowance. The amendments’ long-term impact on the number of earnings-related allowance recipients is not yet known but according to the government, they aim to promote employment and thus reduce the need for earnings-related allowance.
Regional differences in the increased number of earnings-related allowance recipients is explained by how the economic situation in each region is reflected in local industrial, construction and business activities as well as the public sector.
