In English
11.5.2016

Let’s plant the seeds of future profits!

MAJIVECKA / 123RF

Grab a rake, a shovel, a pair of gloves, a wheelbarrow and daddy’s money. It’s time to make investments and plant the seeds of future profits. The government’s education reforms accumulate debt, poverty and unpaid work.

JECATERINA MANTSINEN text ILONA RYTILAHTI translation

I wanted to write about unpaid internships taken on by students or recent graduates. I had to get to the core of the phrase ‘unfortunately this internship is unpaid’.

In the mind of a student, this phrase raises two questions. Would I work for free for a company that has no intention of hiring me in the future? How would I be able to support myself?

I arranged an interview with ETLA Research Director and Professor of Economics Mika Maliranta. He thinks that for new graduates, it is logical to accept unpaid work. It is an investment in their professional skills.

”It makes sense that students don’t get paid, seeing that their education isn’t yet complete.”

I asked Maliranta about the problems of unpaid internships. What about those who cannot make that investment and work without compensation? What if you do not have parents who could back you up financially?

“That’s a good point. Welfare state is a great invention. It’s important to think about the public sector’s role in achieving the equality of opportunities. It’s about how higher education should be financed.”

 

Investment, investment, investment.

Education has always been considered more of less of an investment, says Matti Tuomala, Professor of Economics at the University of Tampere.

“The Minister of Education is parroting these phrases she’s been told to repeat. Phrases about how the cycle of debt must be broken and how the national economy has to take a turn for the better. And how making cuts is a solution.”

“People have always talked about education in that way, telling their kids that education is the most important investment their kids could make.”

Investing in education means that today’s actions will yield profits in the future. The reasoning behind a student earning less and running into debt is that eventually, a university degree leads to a career and a higher level of income.

Investment is an economic term, referring to a sizable sum that is expected to pay for itself later. An investment is always risky, but it is like a hint of something fresh, something great.

And of something strange. What has happened to Finland, a country where education used to be a right and an asset to the society?

 

Sipilä’s government took extreme measures. They had to. Education, the country’s crown jewel and foundation of the welfare state, faced unprecedented cuts. It was absolutely unavoidable. Cuts were directed to all levels from early childhood education to universities.

Professor of Economics at the University of Jyväskylä Roope Uusitalo was asked to prepare a report on where to direct the cuts to the student financial aid. His report was published in February.

The report says: “Education is an investment in the future. Students’ income levels are low, but rise rapidly after graduation.”

The report suggests an increase in the amount of student loan. In March, Uusitalo wrote a blog post responding to criticism and adding that the loan repayment could be bound to annual income.

For the time being, it seems that a bigger part of studies should be financed with a loan starting from autumn 2017. Naturally, this depends on how the government will implement the report’s proposals.

Tuomala thinks this report paints too simple a picture of the student financial aid. He points out, however, that Uusitalo was tasked to find grounds for how to make these cuts. Tuomala says the question of why these cuts are needed is more important.

“The Minister of Education is parroting these phrases she’s been told to repeat. Phrases about how the cycle of debt must be broken and how the national economy has to take a turn for the better. And how making cuts is a solution.”

He adds that most economic scientists disagree.

“It’d be good if students saw internships more as an investment. Instead of being short-sighted and thinking only about money and the next month’s bank statement, students should think a few years ahead.”

“If the economy isn’t doing well, cutting from the public sector will only make things worse.”

The Ministry for Education and Culture has ordered ETLA to look into the proposed student aid cuts to and their effects on student loan and working students. The report is due this spring.

Maliranta shares Uusitalo’s view on the loan increase.

“Investments are often made with external money.”

 

“The world actually isn’t more insecure than it used to be, but how could students know that when people are always talking about the rising insecurity”, Uusitalo writes in the blog.

Perhaps the 49,000 highly educated, unemployed people could provide an answer. The number of highly educated people who have been out of work long-term, for at least a year, is on the rise.

The trade union confederation Akava states in their unemployment overview that 41% of doctorate graduates, which translates to 704 individuals, had been unemployed for over a year at the end of January. Similarly, 35% of unemployed people with a Master’s degree, equal to 7,554 people, fell into the category of long-term unemployment. In total, 32% of highly educated, unemployed individuals had been out of a job for over a year.

If unemployment continues for over 12 months, landing a job is more and more difficult. The intense competition over a decreasing number of jobs is unlikely to change any time soon.

 

Professor Maliranta said it. An internship is an opportunity to show what you are made of and make new contacts. It is a way to improve your chances in the job market.

Especially people without an existing network of contacts, for example family ties, value this opportunity.

“Contacts and relationships are the reason why some people get a job more easily than others. If you don’t have networks, you’re in a more challenging position.”

Maliranta does not see unpaid interns as a way for companies to capitalize on free workforce. Not even when companies employ a large number of interns. Quite on the contrary, actually. Maliranta says that in popular fields, companies have taken responsibility for training students for new industries.

“It’s a common practice that might seem unfair or strange from the perspective of an individual student, but if you look at the big picture, it makes more sense.”

“It’d be good if students saw internships more as an investment. Instead of being short-sighted and thinking only about money and the next month’s bank statement, students should think a few years ahead.”

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