“It was a surprise that summer jobs count as well” – Earnings-related allowance is an unfamiliar concept to young people
Earnings-related unemployment security is an unfamiliar concept to many young people who are under 20. However, not joining an unemployment fund can lead to serious financial losses. We talked to young people, teachers and government employees to find out the reasons for this lack of information.
“I don’t know how it works. I guess you get some security if you become unemployed. I think that it is relevant once you have graduated, have a real job and live on your own.” – Aada, 19
”I have probably heard that word somewhere, but nothing really comes to mind.” – Oskari, 18
”You can get it if you become unemployed, but I guess you have to have done something before getting it. I feel like it isn’t relevant in my life until I’m a real adult.” – Saara, 18
When you talk to young people who are under 20 years old, you quickly understand that earnings-related unemployment allowance is a vague and foreign concept to them. It is something that has to do with being “a real adult” somewhere in the future.
In reality, however, earnings-related daily allowance can be granted to anyone aged 18 or over who is a member of an unemployment fund and fulfils the allowance criteria, such as the previous employment condition.
For example, you can receive the allowance if you
- decide to enter the labour market instead of continuing your studies after secondary education but become unemployed or laid off
- have summer jobs during your studies but cannot find a job immediately after graduation
- have summer and part-time jobs before your military service but are unable to find a job right after that.
What does it mean to receive earnings-related daily allowance in practice?
To put it simply, you get more money while you are unemployed or laid off than you would if you were not a member of an unemployment fund. How much more? That depends on what your salary was before you became unemployed or were laid off.
“These things should be explained so that people would understand the relevance to their own lives”
For this article, we talked to several young persons who had already gained work experience over several summers. Some of them had also done part-time work. Even though they had already opened the door and entered the labour market, they had not given thought to unemployment security.
“I don’t think I’m the only one who doesn’t know. We never talk about this stuff with friends.” – Pete, 17
”I think that everyone else knows just as much as I do, which is very little.” – Saara, 18.
The young people remembered seeing the terms “earnings-related daily allowance” and “unemployment fund” in their textbooks, but did not see how they could be personally relevant to them. The subject started to seem more important once they understood that having a summer job can help accumulate the number of work weeks required for daily allowance and that it is possible to join the unemployment fund without knowing what your future career is yet.
”Unemployment is a serious thing. It would be good to know if you were entitled to some kind of compensation.” – Pete, 17
“It was a surprise that summer jobs count as well. These things should be talked about more. Not through terminology though, but in a way that makes you understand the personal relevance.” – Aada, 19
”It would be a good thing to have a compulsory course on concrete ‘adulting skills’, such as unemployment security and taxes.” – Saara, 18.
”I usually spend one lesson on this topic”
Social studies teachers and the Finnish National Agency for Education say that these matters are, in fact, discussed in school. According to Kristina Kaihari, Counsellor of Education, employment matters are in the curriculum in both basic education and general upper secondary education, where it is included in social studies and in the transversal competence area of societal competence, which is incorporated in all subjects and includes working life skills.
Counsellor of Education Tuija Laukkanen says that the topic is embedded in the requirements of vocational upper secondary qualifications, such as the themes of operating as a member of society and a citizen and operating in the world of work, and that there is also optional economics training available.
Mari Hannola-Antikainen, developer and teacher of social studies, who has worked at the Lauttasaari High School for International Business for years, says that general upper secondary schools teach unemployment security matters as a part of a course on economics.
“I usually spend one lesson on this topic to explain the concept of earnings-related allowance, as well as its pros and cons for the society, individuals and businesses. The topic is also touched on when talking about the challenges of public finances and when discussing the role of income transfers in the Nordic welfare state during the first course on social studies.”
Mari Hannola-Antikainen, who transferred from the Lauttasaari High School to Economy and Youth (TAT) this autumn, thinks that the subject is important and that it should be discussed through the framework of advantages and disadvantages.
“The students and I have discussed not only the benefits of earnings-related daily allowance but also its negative effects on motivation. We have also talked about things like individual responsibility and local bargaining. I have explained the subject by using concrete examples, such as: ‘Paper worker Pete, 55, becomes unemployed. What are his options?’"
Max Mäkinen, social studies teacher at the Lauttasaari Coeducational School, is thinking along the same lines as young people and believes that unemployment security is a distant concept for comprehensive school students.
“Comprehensive school students are more interested in the financial support for students. Our textbook discusses different forms of unemployment security, but earnings-related unemployment allowance and unemployment funds are not mentioned at all.”
“You can accumulate the required 26 working weeks over the course of 9 years”
The young people we interviewed felt that it is up to the teachers to discuss unemployment security – as long as the timing and approach are right. They did not believe in the power of social media influencers or specific awareness-raising events.
“No one would watch those kinds of social media videos anyway.” – Pete, 17.
Saara, 18, thinks that young people can look for information online when they need to. “I would probably try to find information by the time I became unemployed.”
Of course, it is unfortunately not possible to join an unemployment fund when you have already become unemployed. You have to join when you are in paid employment.
Fortunately, however, many young people have come to realise this after the pandemic led to lay-offs and an atmosphere of uncertainty.
According to the Federation of Unemployment Funds in Finland (TYJ), more than 80,000 young persons under the age of 30 joined an unemployment fund in 2020. This means that the number of young members increased by 45% compared to the previous year. The majority of them, over 33,000 young persons under 30, chose YTK. In 2020, the number of new YTK members under the age of 30 increased by 71% compared to the previous year.
The typical age for joining YTK is between 25 and 29. However, joining the unemployment fund would be a good idea at a younger age because all paid work, including summer jobs and part-time work, count towards the working condition of daily allowance.
“People should also know that the time spent on studies, military service and non-military service is “ignored” when calculating the number of work weeks required for meeting the working condition. This means that your summer job months will not go to waste even if you study or do your military or non-military service after that – on the contrary. You can accumulate the 26 working weeks required to meet the working condition over the course of 9 years and be entitled to earnings-related daily allowance after completing your studies, military service or non-military service – provided that your unemployment fund membership is valid the whole time,” says Petja Eklund, Senior Specialist from YTK.