The dysfunctional regional job markets

In the beginning of my career I worked at a microelectronics center of a research institute in Helsinki area, Finland. Most of the personnel at the unit were from technology, but we also had an elderly ex-firefighter as a custodian. Even though he was in good shape, that was not good enough for work as a full-time firefighter anymore. He did various chores at the building, but his actual duty was: when the fire/chemical alarm rang, he run to a closet where he would dress into a polished clean industrial breathing set, and entered the cleanroom to find the cause of the alarm. Usually, it was just a false alarm he could check, or a small leak he could fix.

The couple of emergencies a year this man could fix saved much more money than his salary was. If the firefighters would have entered the cleanroom, save done there anything, both the cleanroom and the equipment there would have required thorough and expensive clean-up taking many months’ time.

The work of a firefighter is an example of a job requiring strength and endurance, not feasible for the elderly people anymore. It is still a waste of money and ability to put people to retirement already on their fifties — they could do other jobs for decades to come. But what would these other jobs be?

Ex-firefighters in their 50’s looking for a new job face an uphill battle. Having a working spouse makes relocating difficult. For the traditional school custodian jobs there probably are also younger applicants. The probability of the firefighter landing on a new job is low if the applicants are chosen to each job individually without heeding the externalities. Should the social impact of recruitment be taken account of and the jobs be tailored to the abilities of the job-seekers? According to a Työpiste magazine article (Finnish Institute of Occupational Health, 21.5.2019), a practical nurse in Southern Finland was trained to be a secretary at her workplace in contract apprenticeship with the support of a retirement fund — I wonder if that job was ever opened for public recruitment.

A historical perspective on social security

Discussing the pre-modern social security brings usually into mind the poorhouses and child auctions. Other forms of social help existed, but in a form not easily recognizable to modern people. Widows sook new spouses, as did my great-grandfather and his new spouse: a working widower needed a wife to take care of the house and the children, a widow needed someone to provide for her and her children. When a factory laborer died at work, of illness or at war, the widow might be arranged a suitable job at the factory to provide for their children.  The commander of the garrison in Kuhmo, Finland, during the Interim Peace 1940‒41, sent a hand-picked young conscript with an army horse to work on the farm of a war widow alone in the ruins with her children: their subsequent marriage was a happy result of the plan (Paavo Susitaival, Korpivaruskunta, WSOY, 1954).

The upbringing of the orphaned J.R.R. Tolkien as well as of his future wife Edith Bratt was paid by a rich widow as recommended by the priest acting as his guardian. A poor Finnish orphan child of early 19th century was lucky to get to the Finlayson school at Tampere. The help trickling down from the rich did not reach nor help everyone in need, but when it did, it could be way better than nothing and sometimes also well-targeted. The 19th century politics were far from ideal, but there may have been something there for us today to use to improve current social security systems.

Unemployment benefits help those in need, but the best long-term help to an unemployed would be a new job — with reasonable salary, of course. Social security can’t completely replace that. For the public finances, each unemployed landing in a new job is an improvement, even if the salary wouldn’t match the unemployment benefits.

Want of professionals in remote areas

Remote areas suffer from population depletion, unemployment, and want of specialist professionals. According to a statistical analysis (Osmo Soininvaara, blog 17.12.2018), 75 % of graduated 25‒34 years old in Finland live in the five most populous sub-regional units (Helsinki area, Tampere, Turku, Oulu, and Jyväskylä), of which the share of Helsinki is growing. As most of the 25 % left is taken by other sub-regions with universities, how many academic graduates are left to the smaller cities and countryside? It would occur to me that the dearth of specialist professionals to replace the retiring ones is going to wreak havoc in Finnish area hospital and health center network — with greater effect than any government policy, such as a social and health care reform, would have.

Even if young physicians, firefighters, police officers, teachers, or engineers would themselves be interested in moving to remote areas, the problem is in getting employment for their spouses. That job should be found and agreed before signing the other’s job, lest the spouse be in danger of long unemployment.  A small municipality might not have a job opening for an engineer for decades (before either of the current two engineers retire). Thus, we are here talking of a very short timeframe available to find the job for the spouse, in range of a couple of months. I’d call this as a requirement of liquidity of the job market. This is a very strict requirement for the job market of more and more specialized professionals.

Couples are thus left with bad choices: have one in odd gigs or even unemployed in a growing city or the other unemployed in the remote area. They usually resort to selecting either as the home and either of them commuting to work. Specialist professionals commuting from a growing city to remote counties might not be very much attached to their jobs: if a new job closer to home is available, they’ll be ready to leave the old job on short notice. I did myself commute to such a job 70 km from home, which severely restricted my ability to take part in the daily chores at home (such as taking a child to daycare in the morning or picking her up in the evening). At my employer there, most of the blue-collars were locals, but most of the white-collars commuted from nearby towns or the city like me, leading to high turnover of white-collars.

The demand for professionals is high, and thus the prospering exporting enterprises of Upper Savonia region — having trouble recruiting academic professionals — have founded R&D and sales units in the University cities of Helsinki, Tampere, and Oulu, far from their base. Herzogenaurach (Bavaria, Germany), the hometown of the sports equipment and clothing giants Adidas and Puma, was not able to attract the R&D top professionals (such as designers, brand specialists, and specialists of digital technologies) to move there (Helsingin Sanomat, 29.9.2014).

Cities and municipalities often work to prevent segregation of town parts, but is there nothing to be done to segregation between regions, even countries? What can be done to the flyover country?

Another source of problems to remote areas is the division of job market with regards to gender. A new manufacturing unit or investment brings new jobs most often to male-dominated professions, but few jobs to their spouses. A manufacturing unit does not draw the young ladies with academic education from their university town to the countryside (Talouselämä, 3.7.2019). More equal distribution of sexes to various professions would, also for this reason, be beneficial to the society as a whole — it’s just been very difficult indeed to find ways to amend this division.

The equine hospital in Kiuruvesi, Upper Savo, has not found applicants to leading positions of experienced veterinaries (Kiuruvesi-lehti, 20.5.2020). Maybe they should turn the search around: look for a veterinarian whose spouse’s skills and knowledge would be needed in a local enterprise or at the municipal offices. One should look to employ two people, not one, as two-career families are a norm. Vets are also a special case because even though livestock health is vitally important to food safety and public health (screening of zoonosis such as salmonella or swine flu), they are in high demand in cities for small animal practice for pets, which is a lighter and better paid job (The New York Times, 6.2.2007).

This policy would, however, require coordination between private and public employers, and hand-picking people to the jobs. This is not possible through open and appealable applicant screening processes. For the public sector, this might even be illegal.

One of the solutions proposed has been work that doesn’t need to be restricted to a single location (Tytti Määttä, Kaleva, 10.9.2019). The spouse in countryside could then work remotely from home, even if his/her office would be in  a city. In some jobs, this is possible, but usually only part-week. Many jobs require presence (e.g. that of nurses, shopkeepers, firefighters, etc.). Remote work also prevents one from having all those non-organized small meetings and discussions with one’s colleagues. The employer might also question a remote worker’s attachment to work: if one isn’t at the workplace, how much he/she is committed to the job? The employee may also fear being out of sight leading to being out of mind: is his/her career going to advance as well as of those present, or is he/she the first to go in case of layoffs? It may also be easier to change your existing work to remote working from countryside, than to find a new remote job if you happen to lose one.

One solution which keeps smaller communities afloat is a tradition of special industry in the community, e.g. a paper mill or optical manufacturing. This may work well for generations, but relying on one field of industry or one employer comes with risks, discussed by Paul Krugman (The New York Times, 30.12.2017). The luck may run out one day: flat screens may replace the CRT manufacturing, chemical film industry may be replaced by digital cameras, or people switch newspapers or magazines in paper form to reading them from tablet computers. When the support column in form of a local paper mill or CRT factory closes, the community is in economic and social ruin.

Another problem in the remote areas is housing. As there are few quality rental homes available, one usually needs to invest to a home, usually buying or building a house. If one needs to relocate, the home may not be saleable, or one loses much (or even most) of the investment by selling with lower price than the building cost. The countryside factories of old had a solution: company-owned residences. The factory would always need a manager, engineers, and factory physician, even if the people would change. Municipal doctors had their official residences, so did the priests. This was, of course, way simpler in the society of one-career families. Have the local communities lost something as a byproduct?

The dysfunctional labor market

The shrinking working-age population causes shortages of labor in both industries and social services. As a solution, the working career should be extended, but aging people losing jobs face difficulties landing in new jobs on the open job market. A more coordinated labor market would bring complex issues e.g. in wage formation. What would be an acceptable salary? Is one required to move for new employment elsewhere or take a job requiring long or difficult commute? Without a market, balance of supply and demand, the acceptable price is difficult to decide. The former salary of the employee in question can’t be a rigid baseline.

This brings us to the issue of job market in general (Touko Aalto, Talouselämä, 30.11.2019). At least in Europe, only a minority of us work in fields and geographic areas where: 1) there is enough open jobs and applicants to have a liquid market where the balance of supply and demand could be found; 2) the salaries are negotiated between the employee and the employer. In Europe, most of the union-negotiated salaries especially in blue-collar jobs are pretty rigid, the employer can in some cases (such as Finland) pay extra to get or keep a more valuable employee. The other major group where there is no open market of salaries is in public sector. Some professions, such as MDs are in such a short supply that even the public sector gets itself to negotiate personally, but this is not usual. Thus, for most of us, there is actually no real job market, just jobs.

Our job market is intrinsically somewhat inefficient. If, for a generalist job, there are a hundred applicants applying for a hundred jobs, each applicant should write several dozen applications and each employer evaluate dozens of them before recruitment is completed. This takes weeks or months, with a depressing effect on applicants, and employers trying to find shortcuts to screen/drop applicants without reading all the applications. Not to mention that the applicants are recommended to phone the employers: how many phone calls the employers actually want to take per recruitment?

Some kind of artificial intelligence application might help to match the employees with the employers. For top management, this is traditionally done by professional headhunters. Some internet-based services try to do this for others, too, to some extent: LinkedIn for the white-collared people mostly in business and technology, can be seen as an example. MeetFrank is a new application but seems to be targeted to software business. AI applications should be built with care, however, not to have hidden or even unintentional biases. Algorithms could help solve the two-career-family problem by considering the needs  of several employers and the skills and needs of both spouses.

Another part of society facing problems with two-career-families are those professions requiring moving aboard for several years: diplomats, university post-docs, and enterprise expats (Helsingin Sanomat 21.9.2019). The employers would like to hire all these as individuals, not considering the spouse’s career. In the academic world, graduated doctors should move to another university for their post-doc gig. How to arrange for the career of the spouse in such a case (TEK-lehti 2/2012, pp. 42‒45)? Quite often, the spouse stays home with the children in the new university town, often at a maternity leave for the beginning. This may have a negative effect on gender career equality.

Mitigating the individualism?

The Finnish public sector requires certain language skills, often both Finnish and Swedish, from its employees, along with other requirements. The Director General of Finnish Customs Hannu Mäkinen discussed the effect of these and other requirements to the employment rate of immigrants and disabled people in Helsingin Sanomat (19.10.2019). The Finnish education sector, social and health care, and police would all need employees able to speak the immigrants’ languages — couldn’t they employ immigrants for that?

Also the foreign students in Finnish universities and institutions have trouble finding job after graduation, undermining the benefits to the society. From personal experience, finding e.g. automation engineers of Finnish background able to communicate in Russian is more than difficult. One should, thus, look for a student of automation engineering of Russian background but studying in Finland, to work for a Finnish company. A service to bring together the employers in need and the employees with suitable background is needed.

Our current labor market is extremely individualistic. Each job seeker should be regarded as a distinct person and no one should be discriminated or favored in unduly fashion. Same is true for university admissions. Changing these standards brings, of course, the risk of traditional corruption, nepotism, or selection on political basis. In the case of specialist professionals where an actual liquid job market does not exist in smaller than metropolis-sized cities, the remote areas need some tools to use. A professional with a family cannot be handled as just a single person. There are also other issues of poorly working or nonexistent job market, such as people hard to get employment due to social or health based reasons. One should also note the small and remote ethnic communities such as Sámi homeland or Greenland which do not have the population to create an academic job market.

Current trends are also creating ill will of people in remote areas against the education provided by universities. The education only takes the young bright minds — especially women — but does not provide professionals that the local services need. This may have an effect to the political polarization developing between the remote areas and growing university cities. Concentration of young women in university cities and young men in the declining countryside may also make mating difficult and affect the decline of birth rate, as Karla Tempas pointed out (Talouselämä, 3.7.2019).

Solutions?

My French sister told me about a solution one of her friends found: she had returned to her remote hometown, and looked around to find out there is a need of nurses. Thus, she enrolled to adult education and has now a lifetime job. Could this solution help other people and employers, too: look on the people who already have settled to a town with their families and train them to the jobs that are specifically needed, e.g. as teachers, police officers, nurses, maybe also MDs? This would require targeted enrollment of students.

Maybe our current life model of graduating young and then settling to a career is not a solution to all the needs of our society. This, however, is where loan-based student support and tuition payments push people to. Adult education would, then, need more economical support than today (The Economist, 14.7.2017), also for the family life of the student. The remote areas don’t have the universities and institutions needed so studying would require a lot of travel and being absent from the family life and child care.

Arranging vocational education in the villages of the countryside is difficult, too. The young are few, and education can’t simply be divided to different municipalities or villages (e.g. teaching the young in this village as barbers and those of that other village as electricians). Thus, vocational schools require a wide student base and, thus, the young to move out of their homes in faraway villages early, living the weeks in school dormitories. The relocation and long commute add to the strain of studying, causing some to drop out and become socially excluded. As a result, even the employment rate of the men in the countryside is lower than that of women, notwithstanding the lack of labor. The young people in danger of becoming socially excluded would need more support. Fitting vocational education to local needs and bringing it to small communities as courses and on-the-job training might bring some help, as demonstrated in Northern Savo in Finland (Savon Sanomat 23.9.2019).

The employers should modify their recruitment habits to the existence of two-career families and the lack of professional labor. If the employer in question does not have use for the skills of the spouse itself, it would be wise to cooperate with other local employers to bring the whole family to the municipality. Sometimes, then, the professionals are laid off due to the financial troubles of the employer. In those times, the local employers should act to keep the trained professional there. If the person moves away to a new job elsewhere — with his/her family — it is improbable that these hard-won professionals would ever return. With a job market lacking liquidity, the employers need to be able to hire for future needs, too; not just for the present.

Similar solutions would also be needed to help young professionals (in family-founding age) running a cycle of temporary employment. These short gigs, especially those of women, are often pointed out as a probable cause of the decreasing birth rate. Temporary employment is often caused by the need to recruit a temporary worker to fill in during parental leaves. As the public services are big employers, they could also provide permanent employment for deputies, too. This would require flexibility on job arrangements: the employer should be able to move a teacher from school to another, a nurse from hospital to another, within a specified area. The employee would get job security in return.

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