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Why is the Fund a fund?


  • YTK

Unemployment funds have a longer history than independent Finland. Initially, the unemployment funds were only for certain groups of workers, and the highly educated did not even want to belong to them. The birth of the YTK changed the field of unemployment insurance and laid the foundations for modern, independent unemployment insurance funds.

The purpose of an unemployment fund is to provide earnings-related security and related maintenance benefits for its members. Unemployment funds were originally called “cash offices” because they paid out money.

Finland’s first unemployment fund was set up in 1895 within the oldest trade union in Finland, the Union of Finnish Accountants. It became customary for trade unions to set up unemployment funds for their members. The membership fees for both were collected in one go.

Before 1917, the unemployment funds operated on the basis of mutual agreement, as there was still no legislation. Until well after the Second World War, unemployment funds were mainly limited to a small number of organised skilled workers in industrial and residential centres.

Most of all workers were excluded. When unemployment struck, many of those who were excluded were forced to take emergency or unemployment jobs, which were provided for the unemployed in, for example, migrant workplaces, even as late as the early 1970s.

The idea of a new kind of fund was born in the 1990s

The duality of unemployment security has continued to this day. Earnings-related unemployment security is now the norm for wage-earners in stable and regular employment. Entrepreneurs have their own system. Unemployment security for those who are not in the fund, who are starting their career or who have been unemployed for a long time comes as basic daily allowance or labour market support paid by Kela.

For a long time, university graduates were not afraid of unemployment. Education was a strong protection against unemployment. It is telling that when architects and engineers set up an unemployment fund in 1969 – one of the first unemployment funds for highly educated people – there was a debate about whether it was appropriate for their rank to set up a fund. Unemployment was stigmatised unfavourably.

Since then, more or less all professions have had their own unemployment funds. By the 1990s, there were more than 70 unemployment funds.

The YTK, which started operating in 1992, was the first unemployment fund to be set up independently of trade unions and open to workers in different sectors, and its creation revolutionised the whole field of unemployment funds. It was now possible to belong to the fund regardless of one’s profession and without any other commitments.

Since then, the mergers have led to a drastic reduction in the number of unemployment funds. The mergers have been driven by the government’s demands for financially stronger funds that are better able to safeguard the interests of their members.

The text is based on the anniversary booklet Avoimesti erilainen kassa – YTK:n 30 ensimmäistä vuotta.