When your wages aren't enough to live on
“The increase in precarious employment, meaning the move from full-time, permanent jobs to uncertain, atypical jobs somewhere between employment and unemployment, feeds straight into working poverty", says Niina Tanner, who prepared the report for PAM. Photo: Liisa Takala.
It is estimated that there are around half a million working poor people in Finland. What drives them into poverty can be irregular employment or having too few working hours, says Niina Tanner, who prepared a report for PAM on working poverty and its costs.
The study indicates that the main reasons for working poverty are sudden changes in personal situations and the fact that most single parents are women. Only 14 per cent of single parents are fathers.
Working poverty refers to situations where an employee's wage income is not enough to lift their household out of poverty, even when combined with the income of other family members.
The report, entitled New Job, but poor – working poverty and its costs in the hospitality and facility services sectors follows on from researcher Niina Tanner's previous report which looked into the economic impact on taxpayers of working poverty in the retail sector. Tanner's new report focuses on the hospitality and facility services sectors.
“The increase in precarious employment, meaning the move from full-time, permanent jobs to uncertain, atypical jobs somewhere between employment and unemployment, feeds straight into working poverty. These jobs include irregular and part-time employment, work on zero-hours contracts and self-employment”, Tanner says.
Odd jobs and thus the risks of working poverty are very much centred on service sector employees. For example, involuntary part-time work is common in private service sectors. In the hospitality sector almost seven out of ten and in the facility services sector well over half of part-time employees underwork due to the lack of full-time employment.
“In order to get adjusted benefits, employees must have registered as unemployed jobseekers with the TE centre, meaning that they declare that they are prepared to take on full-time work”, Tanner stresses. “From that we know that these people are without full-time work.”
You can apply for adjusted earnings-related benefits to support your income if you work part-time or are partially laid off.
”The machinery of the welfare state is also so complex that not everyone understands it and not everyone wants to fight in order to get help”
Odd jobs and poverty also mean that thousands of workers are having to top up their income with social security– for example adjusted benefits, housing assistance or the last resort in social security, income support. The price tag for society of working poverty was around 500 million euros in 2017.
If jobs are scarce, taking a job can in practice also mean that income problems get worse. This often results from backlogs in processing claims involving benefits and wages. Because of this red tape, people don't always even apply for social security.
It has been observed that zero-hours contracts for example can be a risk to physical and mental health.
“The machinery of the welfare state is also so complex that not everyone understands it and not everyone wants to fight in order to get help”, Tanner states.