The Government’s Painful Cuts, Calculated and Explained

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Timo Soini (Finns), the foreign minister, Alexander Stubb (NCP), the finance minister, and Juha Sipilä (Centre), the prime minister, at a press conference in the Government Palace in Helsinki on Tuesday September 8, where the leaders gave an overview of how the painful cuts will affect people. Picture: Sakari Piippo

Everyone has to carry their responsibility to lift Finland from the economic rut. This is the common theme of the painful cuts planned by the government and holds true for about everyone else but the members of the parliament.

“Each one of us, has to make decisions against our will, from which each of us can have an opinion that this is not the right remedy. In this list of available means there are very repulsive things for me as well,” said prime minister Juha Sipilä after a meeting with the Economic Council at a press conference at the prime minister’s official residence Kesäranta on Wednesday morning.

Here are five of the most painful cuts

1. The benefit level for sick days will be reduced so that the first day will in future be unpaid and 80 per cent of pay will be paid for days 2–9.
2. Overtime pay will be halved and Sunday pay will be reduced to 75 per cent.
3. Epiphany and Ascension Day will be changed into unpaid public holidays without reducing annual working time.
4. Long holidays, particularly in the public sector, will be shortened from 38 to 30 working days.
5. The private employer’s social security contribution will be reduced by 1.72 percentage points from the beginning of 2017.

After the news of the unpaid first day during the sick leave started spreading in the social media, the common nominator in some of the comments was that “I will simply go to work, sick, and spread the flu to everyone else.”

Paavo Arhinmäki, the chair of the Left Alliance, called the move of putting the responsibility of a sick day to the shoulders of the employee “dangerous”.

“When people can’t afford to stay home and be sick, later the sick leave will be extended and the whole work community might get sick. If the unpaid sick day involves parents who are taking care of their ill child, the families with children will suffer,” he said.

In numbers, the unpaid sick day equals losing about 110 euros from the wage, according to Joonas Rahkola, an economist at the labour market organisation SAK.

A sick leave of three days would in turn amount to a loss of 155 euros from the wage. The calculations are based on the average salary of Finns, which is 3,300 euros.

Among those unaffected by the cuts of sick days are the members of the parliament. The MPs are paid a monthly salary of 6,380 or 6,858 euros regardless of how many days they are sick, according to Pertti Rauhio, the director of administration at the parliament.

The policy is related to the “position of trust” that the members of the parliament enjoy. In other terms, because they are elected by the citizens, they are not considered as ordinary wage employees.

When considering the other painful cut of reducing 75 per cent of the Sunday pay, this, according to Rahkola, would amount to a loss of 30 euros per Sunday, for one earning the average salary.

In Finland, the cuts will be felt especially by those earning a lower salary and in professions occupied by women, such as those working at stores and restaurants and those involved in cleaning jobs and working as nurses.

What is the government hoping to accomplish by all this? According to the Government’s Office, the objective is to raise the employment rate to 72 per cent and the number of people in employment by 110,000 by the end of the parliamentary term (2019). Among others, living on debt will also be brought to an end by 2021.

According to Sipilä, “the government’s solutions are essential to improve Finland’s competitiveness.”

All the parliamentary groups involved in the government (cabinet) including the Centre party, the Finns party and the National Coalition party have, for their part, approved the proposed measures.

Prime minister Sipilä will submit the proposed cuts to the parliament by the end of September 2015. The aim is to make the legislative amendments necessary by June 2016. At the latest.