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Finland – Middle income jobs disappearing

13 September 2013

Traditional office and industrial jobs are becoming less common across Finland. Structural changes in the labour market are forcing people who would previously have taken jobs with reasonable salaries to compete with young people for low-paid work, according to yle.fi.

The Finnish labour market is creating more high income jobs, but at the expense of the middle income bracket. Office and industrial jobs; such as travel agents, secretaries, mechanics, and fitters, are less available than before, as many routine tasks have been replaced by technology. Some jobs have also been outsourced to countries with cheaper production costs.

In the travel industry, for example, technology began to have a big impact around the turn of the millennium. Transport reservations began to move online, travel agents offices closed, and hundreds of people lost their jobs.

Tiina Sirén of Finnmatkat, a Finnish division of German holiday firm TUI, said to yle.fi: “Currently 80% of our customers reserve their trips online. Social media is one of our newest service channels. Often people with complicated travel plans come to our offices, as they need someone with professional skills to help.”

VATT, the Government Institute for Economic Research, said that employment in middle income jobs shrank by -10% between 1995 and 2008. Research Institute for the Finnish Economy (Etla) believes that the financial crisis that began in 2008 only made things worse for those looking for this kind of work.

The hollowing out of the labour market, with the concentration at the top and bottom and disappearance of jobs in the middle, is an international phenomenon. In the 1990s the demand for highly educated workers increased just as education levels in the general population rose. At the same time, demand for workers with lower education levels fell.

Demand for workers at the lower end of the jobs market, on the other hand, is increasing. At the same time, structural changes are forcing more people to chase those jobs.

Rita Asplund of Etla stated that competition is likely to intensify: “Some of the mid-income workers that have lost their jobs will switch to other middle income roles, some will be capable of getting higher-paid jobs, while others will have to be satisfied with low-paid work.”

She continued: “If a significant proportion of them switch to lower-paid jobs, that will ensure that competition for low-paid work will intensify. This could affect young people’s chances of entering working life.”

Ms Asplund emphasised that education remains the key to success in the labour market: “Education generally makes it possible to choose from a wider range of jobs. It pays to seek at least secondary education, so as to be able to enter the current labour market.”

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