Emerging part-time work might lead to in-work poverty

Poverty in Finland has been increasing steadily since 1993, though in 2011 there was a slight downward trend.
16.08.2013 12:51

Poverty is defined as a situation where the net income of a family falls below 60 per cent of the median household income. For example, in a family of one person this means an annual income of 13,640 euro or 1,140 euro per month.

According to Statistics Finland poverty affects 13.2 per cent of the Finnish population. In 2010 some 700,000 people were thus classified. 63,000 were wage and salary earners, 38,000 entrepreneurs, 121,000 students and 191,000 pensioners.

The emerging problem is in-work poverty, when a wage or salary is not enough to meet the necessary costs of living. And this is a relatively new situation.

Eurostats data "At-risk-of-poverty rate after social transfers by most frequent activity status" reveals that 3.9 per cent of the working population in Finland was at risk of poverty in 2011. The percentage is 1.5 times more than in 1995. The figure is, however, low in comparison with the EU27, where the percentage was 8.9 per cent.

Women mostly affected

The in-work poverty risk is on the rise and this is especially true for part time workers. The number of non-voluntary part-time workers is 80,000, out of a total 300,000 part-time workers in Finland.

Forced or “all that's on offer" part time work is most common in service jobs and this leads to income that is below the living-wage level. The Service Union United PAM recently conducted a questionnaire among its members and one out of four confessed having quite big or serious economic problems.

PAM is very critical of the various recent proposals to create more low paid jobs and attempts to cut the salaries of young workers. "By creating consciously a situation where one cannot rise above a marginalised position in terms of salaried work is like jumping into a time machine moving back in time," stresses director Antti Veirto from PAM.

Trade Union Confederation SAK has at its goal that in 2016 the minimum full time salary in collective agreements would be 1,800 euro per month. This would cut the risk of in-work poverty.

The risk of in-work poverty poses more of a threat to women than anyone else. According to Statistics Finland in 2011 a total of 161,711 women and 59,289 men in working life earned below 1,800 euro a month.

Katarina Murto, a bargaining expert at the SAK, says that what is needed now is to have legislation which clearly defines the rules concerning the use of part-time labour. As things now stand the employer has a free hand to make use of part-time work, and this applies to all employees.

"By organising work in a better way at least part of the unfounded part-time work could be avoided. It is, however, clear that part-time work is needed. For many it is a good solution e.g. for reasons like family or studies."

Some 15 per cent of those in working life do part-time work in Finland.

Heikki Jokinen