Increase of labour supply will not heal the Finnish economy | Trade Union Pro
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Increase of labour supply will not heal the Finnish economy

25.10.2013 11:42
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-The results of the policy have remained poor, says Jaakko Kiander, former director of the Labour Institute for Economic Research.

Helsinki (25.10.2013 – Juhani Artto)

Main stream politicians and economists have, in the past few years, called for reforms that would seek to increase the labour supply. Jaakko Kiander does not buy the idea.

Kiander is the Senior Vice President of the pension insurance company Ilmarinen and former director of the Labour Institute for Economic Research.

According to Kiander, the belief in reforms that would increase the labour supply originates from the reform agenda of the Swedish four-bourgeois-party government. It believes that increasing the labour supply improves employment but Kiander says this belief is “weakly justified”. The results of the policy have remained poor. Its supporters reply to critics of this policy that its positive results will be seen in the long run.

If one has to wait from ten to fifteen years to achieve better employment, it is hardly fair to people who are targeted by such reforms, Kiander argues.

In his opinion, the government should act to stimulate the economy. Investments should be directed towards, for example, the building of new flats in growth centers where there is a shortage of flats.

The government laid down its economic strategy on the supposition that exports will lead Finland to rapid economic growth. “However, this plan has not been realised as the whole of Europe began to save simultaneously causing a new recession.”

Kiander reminds us that the onther Nordic countries have higher employment rates than Finland because of their larger public sectors. He thinks that, in Finland, opposition to enlarging the public sector is based on ideological factors.

The Industrial Union TEAM magazine Intiim published Kiander’s interview in a recent issue. The interview is written by freelancer Markku Vuorio.