Situation room report 7.10.2021 – latest developments in the labor market, households and firms

October 7, 2021

The Helsinki GSE situation room continues to publish reports based on up-to-date data monthly from now on. The reports follow the economy’s development from the labor market’s, households’ and/or firms’ perspectives.

The background information for the figures has been collected from the Statistics Finland’s registers.

Key findings

  • Apart from January, the total sum of monthly labor earnings in 2021 remains above the levels of the corresponding periods in 2020 and 2019, yet the difference to previous years has diminshed in August.
  • The number of employment in higher income groups remains significantly above the 2019 level in August, whereas employment according to our €1000 per month measure lags slightly below the 2019 level.
  • Revenue levels have declined in most of the reviewed groups but remain above the levels of 2019. The revenue in hotel and restaurant industry reached 2019 level in July after lagging below it since January 2021.

Labor market

Labor market – earnings

The figure below shows monthly earnings in 2019–2021 based on the Incomes Register. The total monthly sum of labor earnings in 2021 remains above the values of 2020 and 2019, but the difference to previous years seems to be smaller in August compared to June-July. In 2020 labor earnings remained slightly below or above the level of 2019 – the largest difference to previous year’s labor earnings was in May 2020, when earnings dropped prominently.

When examining the earnings figures, please keep in mind that information is uploaded to the Incomes Register with varying degrees of lag, and the figures may be slightly updated later when new data becomes available. In practice, data older than one month can be considered almost final.

The figure below shows the year-on-year change in real labor earnings with respect to year 2019. In 2021 earnings seem to have increased adequately although consumer prices have also increased. For example, year-over-year inflation in August was 0.20% in 2020 and 2.2% in 2021. Data on inflation can be found on Statistics Finland’s website here.

The figure below compares industry-level earnings in August from 2019 to 2021. Earnings in public administration and health and social care appear to have increased the most in August 2021 compared to previous years. Earnings in trade and communications also increased visibly. Earnings in manufacturing in August did not quite reach the level of 2019 but increased likewise compared to the level of 2020.

Next, we examine the changes in earnings in August compared to the level of 2019 by age group. Labor earnings in August 2021 seem to have increased in many of the age groups. Total labor earnings have decreased in age groups under 25, 25-29 and 50-54, and the largest drop has been in the labor earnings of under 25 year-olds. Earnings in August seem to have increased especially in age groups 64+, 60-64 and 45-49.

The next two figures show the development of labor earnings in municipalities in August. The first figure shows the change in labor earnings in twenty largest municipalities. Labor earnings increased from 2019 in majority of the municipalities but decreased in Kouvola and Porvoo.

The second figure shows ten municipalities with the lowest and ten with the highest changes in labor earnings for 2021 from 2019 levels. Although labor earnings have increased in most of the larger municipalities, the second figure shows decrease in the earnings in several smaller municipalities. Earnings seem to have decreased the most in Jämsä.

Labor market – employment

Below, we present the daily amounts of employed in 2019 – 2021 and the change in employment relative to 2019. Here, a person is considered employed if they receive at least 1000 euros of wage income over a month.

In the latest months of 2021, the daily number of employed has stayed near the level of 2019 after having remained below it ever since April 2020. The fresh figure shows that employment in August is slightly below 2019 level. Compared to the level of 2020 the number of employed has been significantly higher since April 2021.

Below, we present the daily numbers of employed in 2019 – 2021 by income groups earning at least €3000 or €6000 a month. Compared to year 2019, the number of employed has grown proportionately more for higher income groups: the number grew more for people earning at least €3000 than €1000. The fresh data points show that the difference to 2019 employment in higher income groups remains remarkable in August. In turn, the difference in the number of employed between 2019 and 2020 was not as significant in higher income groups than for people earning at least €1000.

The 4 figures below show the development of employment according to the 1000€ per month measure in selected 4 industries. Here there are clear differences to be found and most of the selected industries in fact show a decline in employment throughout the year with only Trade boasting levels higher than those of 2019.

Labor market – furloughs and layoffs

The figures below show the weekly new furlough and unemployment spells from 2019 to 2021, altogether and for selected industries. The amount of new spells increased substantially in the beginning of the crisis, but new entries into unemployment or furloughs have in general declined afterwards. During 2021 the number of new furlough spells has slowly declined to the level of 2019, while the number of new unemployment spells falls slightly below that of 2019.

Firms

Firms – revenue

The figures below show the monthly revenue of Finnish firms in aggregate level and in selected 4 main industries measured in amount of employees. The fresh figures from July show that the monthly total revenue has decreased in July, yet still above the level of 2019. Monthly revenue across the different selected industries remains near the level of 2019 or above – of the selected groups now also Hotels and restaurants reached the 2019 level after lagging below it ever since the beginning of 2021.

The figures below show the monthly total revenues in selected regions in years 2019-2021. In July 2021 the revenue in Varsinais-Suomi declined slightly below the level of 2019, whereas in other selected regions monthly revenue remains above that of 2019. Of the selected regions the change in revenue from 2019 in July was the largest in Lapland.

Firms – Entries and exits

The figure below shows the monthly number of entrant firms in Finland 2019 – 2021. Legal entries are firms that start their business in a legal sense, for example, acquire a company ID. Real entries are firms that start their economic activities. Information on real entries is interpreted from various data sources by Statistics Finland. Note that the figures may change as more data is gathered and time passes.

Both entry and exit figures indicate positive development compared to July levels. The fresh August figures show that the number of entries has turned to a slight increase yet lags still below the level of 2019.

The figure below shows the monthly number of firms that left the market in Finland. Legal exits are firms that terminated their business permanently in a legal sense. Real exits are firms that stopped their economic activities, but did not necessarily cease their business in a legal sense. Information on real exits is interpreted from various sources by Statistics Finland. Note that the data may update afterwards when more information is received. It seems that market exists declined from July and returned below 2019 and 2020 levels in August.

Households

Households – Unemployment benefits

The figure below displays the number of applicants for Kela’s unemployment benefits from the beginning of the year in 2019 – 2021. The figure shows striking increases in applications in April and May 2020. In 2021, similar spikes in the number of applications are not observed. In September the figure shows a clear decrease in the number of applicants compared to August as well as to previous years.

Please note that these figures do not include the earnings-related unemployment allowance paid by unemployment funds. Additionally, the figures illustrate the numbers of new applications rather than all those collecting benefits of a given type.

  • 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 mediaCite 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
  • Figures and data: https://www.helsinkigse.fi/korona-data/