July 30, 2020
The Helsinki GSE situation room continues publishing reports based on up-to-date data during the summer vacation season. The reports, which are published every other week, follow the economy’s development from the labor market’s, households’ and firms’ perspectives.
Many figures use the spring and summer 2019 as a comparison period. The background information for the figures has been collected from the Statistics Finland’s registers. The latest available background information from Statistics Finland is from the end of 2018.
Labor market – wage sum
The figure below shows the monthly sum of wages in 2019 and 2020 based on the Income Register. In May, wage sum lagged circa 0.6 billion euros behind previous year whereas in June this deficit reduced to 0.4 billion, approximately. The wage sum has stayed below last year’s level since April.
The figure below compares the industry wage sums in June in 2019 and 2020. All the major industries except public administration have either more or less equal or decreased wage sums in June compared to previous year.
The following three figures show the total labor earnings in Finnish municipalities in 2019 and 2020. The first figure shows the total labor earnings in Finland’s 20 largest municipalities, while the second figure shows the percentage changes. In June, Pori, Vantaa, Rovaniemi and Helsinki had the largest drop in total earnings among these municipalities.
The third figure shows the ten municipalities which have performed best and worst, among all municipalities. In June, the sum of earnings dropped most in Heinola (-10.8%) and Mariehamn (-8.8). Only Vaasa, Kemi and Kurikka mathced or exceeded their previous numbers.
The next two figures show labor earnings by age group in June. The figures show that labor earnings have decreased in all age groups except ages 60 to 64. In both absolute and relative terms, ages under 25 years have suffered the largest decrease.
Labor market – furloughs and layoffs
The below figure shows the daily new furlough and unemployment spells in 2019 and 2020. June and July have seen considerably less new spells than the weeks following the establishment of restrictions to fight coronavirus. Since then, a relatively large share of all spells have been furloughs compared to the previous year.
The next figure breaks down the sum of new unemployment and furlough spells in 2019 and 2020 by industry. The numbers have grown in all industries, with the largest increases in manufacturing, trade, and food and accommodation services. Of major industries, public administration seems to have taken least damage.
Households – housing allowance
The number of applications for Kela’s general housing allowance started to exceed the level of last year as the state of emergency came into effect. By the end of April, around 50 000 more applications had arrived to Kela compared to the corresponding time-period in the previous year. Since May, the growth in the number of applications has been closer to last year.
The growth in the number of applications for housing allowance has increased the most in Uusimaa, where there have been around 25% more applications in 2020 compared to the corresponding period in 2019. Over 80 000 individuals from Uusimaa have applied for housing benefits in 2020. Meanwhile, the growth has been lower than 10% in Pohjois-Karjala, Kainuu and Pohjois-Savo and Keski-Suomi regions.
Households – unemployment benefit
The number of applications for Kela’s unemployment benefits exceeds last year’s by more than 130 000 applications. The numbers started to grow sharply a week after the state of emergency came into effect. Since May, the flood of applications has calmed down, but the growth has remained slightly faster than last year.
The coronavirus crisis has hit labor markets across all regions. Analyzing by region, the restrictions of the state of emergency have been the harshest on Uusimaa, where the number of applications has increased by more than 150 percent. Even in regions with lower unemployment benefit growth rates like Pohjois-Karjala, the applications have increased by more than 50%.
The restrictions during the state of emergency and social distancing hit service industries the most. The characteristics of service industry employees are reflected in the sex and profession distributions of those applying for Kela’s unemployment security. The fact that most of the applicants belong to the younger age groups, follows from their lower rates of belonging to unemployment funds and fulfilling employment conditions.
Comparing unemployment benefit applications with last year’s figures show that the state of emergency has affected families more strongly than those living alone.
Of those furloughed during the state of emergency, nearly three fourths belong to single-family households. However, the number of furloughed living alone and in single-family households have increased equally much from last year.
Firms – share of firms with furloughs
The figures below show the share of all firms with at least one furlough. The share of employees in the firms that have been furloughed is not considered. The figures show numbers by industry, county and the size class of firms (in terms of employees).
During the spring and early summer almost 30 percent of firms operating in the hospitality industry have laid off workers.Analyzing by regions, the figure below shows that the highest share of firms with furloughs is in Lappi and Uusimaa. The figures also show that the largest firms have a comparatively higher share of firms that have undertaken furloughs.
In every industry, region or firm size class, the share has increased considerably in March-April while augmenting relatively little during May-July.
Firms – share of furloughed employees
The below figures show the share of employees that have been furloughed, in firms that have furloughed employees. Each point on each horizontal line describes the situation for a particular month with the month numbers marked inside the points. E.g., in the first figure, a point with number four inside it shows what share of employees was furloughed on average by firms of that particular industry in April, if any employees were furloughed – the numbers do not include firms with 0 percent of employees furloughed. The figures show the numbers by industry, county, and the size class of firms (in terms of employees).
From the first figure, we see that in March and April, in many industries, in firms that furloughed employees, the share of furloughed employees was high. For instance, in the hospitality industry, the share of furloughed employees, in firms that furloughed employees, was around half in March but in July, the share of furloughed employees was less than one fifth.
The last figure shows that the largest firms have furloughed the smallest share of their employees.
Firms – Business Finland subsidies
The below figures show the share of firms that have received at least one subsidy from Business Finland up to a certain date. The figures show the numbers by industry, county and the size class of firms (in terms of employees). In July, less subsidies have been granted compared to previous months.
Firms – bankruptcy applications
The last figure shows the cumulative number of bankruptcy applications in a given year up to a certain date. The x-axis shows a date, and the y-axis the total number of bankruptcy applications left by that date since the start of the year. Years 2018 and 2019 are used for comparison with 2020.
Before measures against coronavirus, there were more applications this year than in the previous two years. The accumulation of applications doesn’t seem speed up from mid-March. Instead, the cumulative number of applications lags behind previous years in July.
- Additional information about the Helsinki GSE Situation Room consisting of researchers from Helsinki GSE, University of Turku, VATT Institute of Economic Research and Statistics Finland: https://www.helsinkigse.fi/research-group/covid-19/
- Additional information about the report: Otto Toivanen, otto.toivanen [at] aalto.fi
- Suggested citation in media: Cite Helsinki GSE Situation Room as the source with a link to www.helsinkigse.fi website.
- Suggested citation in academic publications:please contact otto.toivanen [at] aalto.fi