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9.4.2006

Finnish welfare state exploitation and the new meaning of ‘sisu’

Tags: Uncategorized — Author: @ 3:37 pm

After three and a half years in Finland I think I’ve finally realized the true meaning of [modern day] ‘sisu’: It’s when you work 60 hour weeks, often on weekends, for little pay, and most of your earnings eventually wind up in the hands of the state, every year they take more from your pockets, you live in a little apartment, drive a little rusty car, you can barely make ends meet, your family life and personal life suffers and you get “burned out” – Yet you still trudge on. THAT’s sisu. (yes, the meaning of sisu certainly has changed in recent years)

If you’re lazy, irresponsible, careless, incompetent, and don’t want to work – there’s no better place to be than Finland, cause if you act like that in the U.S….you’ll be out on your ass. In Finland, the state knows they can keep taking more and more from middle and upper income individuals/families, and they’ll keep working even harder. I have trouble understanding why Finns do it, the cheese at the end of the rope just isn’t big enough. It’s that Finnish sisu that keeps people moving and motivated. The recognition and social status is payment enough to keep Finland’s more productive citizens progressing (and trust you me, I am NOT one of those productive citizens). Here’s what I mean

When job satisfaction is high, personnel generally do not mind hard work. In a study commissioned by the Ministry of Labour, University of Helsinki researcher Juha Antila interviewed 2,856 people in 2003 and 2004. The clear message of the responses was that the sense that a job has meaning is the highest priority. For a job to be seen as meaningful, a boss needs to have an understanding of his or her tasks, and the content of the work should be sensible. Having a positive view of a job is seen as more rewarding than a fat paycheck. [...]“People expect more of their jobs, and they work for more than just money”, Antila explains.

Now there’s nothing wrong with that, that’s great that people are more interested in a rewarding job rather than a nice paycheck – but they should have both! This is where the welfare state exploitation comes in, the state knows its citizens are naive enough to work hard no matter what. That’s exploitation. Those two Turkish chefs didn’t get their fair share and either do a lot of typical middle and upper income Finns.

I’ve never heard of so many people “burning out” until I moved to Finland – I’m sure it happens everywhere but it seems to be quite a phenomenon in Finland. Why don’t we hear about Americans getting getting burned out as much. Do Americans just hide these feelings better? Or do Americans just get the proper compensation they deserve? I try to think about how quickly I’d get burned out if I was working 60 hour weeks getting 30K/year versus 60K/year.

And maybe it’s just the IT industry in Finland but has anyone else noticed this salary threshold, whereby you make ‘x’ amount of money and you don’t have to do shit – But if you take that promotion you’re suddenly working 60 hour weeks plus weekends and getting an extra 50e per month after taxes. Crossing that threshold is a difficult, but necessary task for any ambitious person.

And please don’t take this post as some sort of pro-America thing. We’re comparing middle and higher income people in Finland vs. the U.S. How about we take that large group of lower-middle income Americans – The ones who make too much money to receive any state support, but too poor to afford any proper healthcare or much else. That is one group who are much more prosperous in Finland. I just don’t understand why we can’t as a society have this prosperity at all levels.

  • http://stockholmslender.blogspot.com/ mjr

    Well, after Burke, a society is a complex web of interrelated factors and structures. It is not organized rationally, and to change one thing means changing the whole. So, we have devoloped (organically) here in Finland to this constellation where certainly some of the observations you make are correct but which are very hard to change significantly without changing some other things that the majority definitely continues to value. It is a kind of an impasse where we often receive the worst of both worlds. But not always: we maintain an extensive welfare (or social security) state with a dynamic high-tech economy. Not a mean thing at all, but I suppose increasingly difficult in these cold times. This offered in a neutral, adult and even in a conservative (in the old fashioned pre-modern day Republican) fashion.

  • Freeridin’ Franklin

    And maybe it’s just the IT industry in Finland but has anyone else noticed this salary threshold, whereby you make ‘x’ amount of money and you don’t have to do shit – But if you take that promotion you’re suddenly working 60 hour weeks plus weekends and getting an extra 50e per month after taxes. Crossing that threshold is a difficult, but necessary task for any ambitious person.

    Oh yes. I don’t quite follow your logic, though. If your employer exploits you and fucks you over by not paying for overtime like you’re legally entitled to, how exactly is the “welfare state” involved? Hail the Free Market, man.

  • BloatedBubba

    60 hour weeks are mainly for those foreigners who can only make it in Nokia and not move to other engineering/tech places :) The rest bugger off early, especially in the kommun sector.

  • STP

    Now you are on business Phil, Finns do not get how much more they would earn doing the same jobs in America. The most outrageous example of this is nursing:

    http://www.studentdoc.com/nursing-jobs-salaries.html

    Lets see, a home Care Nurse makes:

    Lowest Reported Average Reported Highest Reported
    $50859 $55664 $62846

    Show that to any Finnish nurse and they are going to feel like
    they are getting it in the pooper.

    I know a nurse in US, he said that he would have never become a nurse in the first place if their wages were like they are in Finland.

    A lot of Finns probably would say that well, it is a good thing that people like that do not become nurses in the first place. But how so? In the end, you work to get paid. Not to be the hero of the nation, unless if you are caught in a timewarp in the soviet Russia.

  • http://www.finlandforthought.net Phil

    So, we have devoloped (organically) here in Finland to this constellation where certainly some of the observations you make are correct but which are very hard to change significantly without changing some other things that the majority definitely continues to value. It is a kind of an impasse where we often receive the worst of both worlds.

    I just don’t agree with this “well, this is the best we can do, we’ll just have to accept these problems. change is bad.” attitude.

  • http://www.finlandforthought.net Phil

    If your employer exploits you and fucks you over by not paying for overtime like you’re legally entitled to, how exactly is the “welfare state” involved?

    Yeah, that has more to do with the company or the industry. But in the U.S., those people working those long hours get well compensated, in Finland you don’t often.

  • brlpbrlp

    god damn i hate this so called welfare bullshit. my policy is either work or go to hell but no money free. i’m so out of this country when i finish education. (FYI whiners i’m not raising study help fee or whatever it is, i work weekends)

  • Freeridin’ Franklin

    Yeah, that has more to do with the company or the industry. But in the U.S., those people working those long hours get well compensated, in Finland you don’t often.

    Well then, just demand a raise, threatening to quit and work for a competitor. Isn’t that how the Free Market operates?

  • http://www.finlandforthought.net Phil

    Show that to any Finnish nurse and they are going to feel like
    they are getting it in the pooper.

    Well the welfare state sets the wages. They know they can pay whatever lousy salary and they’ll always find the employees. Then the private companies just set the prices a bit about the public health care.

    People always wonder about the high cost of healthcare in the U.S. Sure, Americans and the US Government would dish out a lot less in healtchare expenses if they could just magically cut all the nurse’s salaries in half like in Finland.

  • http://www.finlandforthought.net Phil

    Isn’t that how the Free Market operates?

    Do you consider Finland to be a free market? If so, is it the same kind of free market that “free marketers” talk about?

  • Freeridin’ Franklin

    Do you consider Finland to be a free market?

    As far as Nokia’s position on the labour market is concerned, it is. Feel free to apply those free market principles if you’re unhappy with your compensation.

  • http://www.finlandforthought.net Phil

    As far as Nokia’s position on the labour market is concerned, it is. Feel free to apply those free market principles if you’re unhappy with your compensation.

    But it’s not just Nokia with the low salaries. Take just about any middle or upper income job and compare it to the US.

  • http://stockholmslender.blogspot.com/ mjr

    Phil, it’s not that change is bad. There are plenty of reasonable structural reforms we could easily make, but can’t because of this current political impasse. In the 90′s the Young Finns and Greens had very constructive ideas that the vested interests just could not accept. To state this is not to oppose reforms but just to say that intelligent reform is very difficult and it can very easily have unintended concequences as social change is a very complex phenomenon.

  • http://www.finlandforthought.net Phil

    To state this is not to oppose reforms but just to say that intelligent reform is very difficult and it can very easily have unintended concequences as social change is a very complex phenomenon.

    Agreed. Any significant change will never happen in this country. Things will have to hit rock bottom before any real reforms are made. But on this blog, I try not to limit my views to changes that could be in this current political impasse.

  • dede

    Well it is true that quite a lot goes to taxes. Not just the taxation on salary, but why does everything in Finland have to be twice as expensive as everywhere else in the world? Why do we see so little foreign brands in the supermarkets? A good example is estonia. Much cheaper groceries and gasoline, much lower income taxes and a thriving economy. Isn’t that a good example to look at?

  • Antti (the redneck one)

    I think Phil has made a correct observation in this one. First, the position of work in culture. In the tradition lutheranism, it is not something you do for the living, it is a method of worship. Then there is the nationalist project from the 19th century, which is still visible in some older academic people; the fatherland gave you the degree, your reward is the service of fatherland, only people with no class care about the money. If you are a nurse, it is supposed to be your vocation and as an engineer, you should be happy planning devices and soldering electronic components, like you did as a little boy.

    When a lot of finnish people emigrated to Sweden in the 60′s and 70′s, they were the nobodies in the swedish society. They worked as heck just to show everybody. I remember those men having their vacation in the old country with their families and new Volvo’s and boasting, how those swedes are real slackers compared to them. Effectively, they were just stampeding their own salaries.

    Like a wrote on some other subject, the middle class pays this whole circus. The poor get the subsidies and the few rich can afford some taxation planning. So how to keep your sanity? I have solved the problem by hanging on a mediocre position, that can be handled by the left hand and investing the “resource surplus” to my own projects and the family. I bet in the US, this wouldn’t be possible for me as the boss would probably be on my neck all the time.

    If working for a company, don’t ever invent anything. You just end up working your ass off with your idea. Get your name first in the patent and get that wrist watch with the company logo presented to you in front of the colleagues. Somebody else gets the profit. If you do engineering for the paper industry, the union calculates how much the productivity improved by your invention and demands corresponding raise to those guys reading pornomags in the supervising room.

    So I take it easy and pay the price, but it doesn’t feel much warmer in the coffin anyway.

  • Liber Al

    Phil wrote: “I have trouble understanding why Finns do it, the cheese at the end of the rope just isn’t big enough.”

    It has nothing to do with sisu. Quite simply, the Finnish nation comprises the biggest herd of lamb ever assembled in one place.

    And, of course, it doesn’t help that apparently over 50% of us lack a faculty of reason — as witnessed in the last presidential elections.

    But what can you do, except wait for people to start exercising their brains?

  • Liber Al

    Oh, to answer my own question above, you can, of course, help yourself by not being either employed or an employer. (I have no idea how anyone in this country, in the present circumstances, would want to be anything else but a sole proprietor.)

    But this doesn’t really solve, for example, the issue with nurses, as Phil pointed out. And I for one would very much like nurses to be adequately compensated.

  • Freeridin’ Franklin

    I have no idea how anyone in this country, in the present circumstances, would want to be anything else but a sole proprietor.

    For every euro that I make, my employer makes two (out of my work, that is). Why would my employer want to be a sole proprietor?

  • S.Y

    Not that I would disagree, I would leave this country at once given the opportunity, but heres something to think about the US system:
    Things might be rolling well over there, but the national debt is growing alarmingly, US dollar is overvalued and trade deficit is at record breaking levels.
    USA would have a huge problem at their hands if the value of dollar would crash to more realistic levels and the national debt would grow insanely high before anything could be done to fix the situation. The country is literally built on debt, which is not being paid back – that means the current lifestyle can’t go on for long. Another problem is outsourcing – if people aren’t paid, there’ll no money to spend. When people aren’t spending, there’ll be less money going to the state and businesses. When the state and businesses doesn’t get enough money, they have to cut expenses.. rinse & repeat. If the dollar loses it’s value, it’ll cause the biggest recession in the history of USA.
    More and more countries are beginning to do trade with euros instead of US dollar. If the progress continues, it will leave US dollar as worthless as the paper it is printed on. Think about the Soviet Union and the crash of ruble.

  • Oregon

    Don’t whine, start your own company! Then you can pay those lousy salaries and make your employees work 50 hour weeks :-) But seriously, Finland is a very good place for business.

  • Freeridin’ Franklin

    Don’t whine, start your own company! Then you can pay those lousy salaries and make your employees work 50 hour weeks :-) But seriously, Finland is a very good place for business.

    According to the right-wing propaganda machines right here in Finland, being a poor entrepreneur, milked dry by those greedy unionised employees, is a fate worse than death…there’s just no reward in it. And what little crumbs those evil employees might leave you the taxman is sure to take away.

    But seriously, in a small country such as Finland, it all comes down to networking. You need to be buddy-buddy with the movers and the shakers.

  • TomiA

    But seriously, Finland is a very good place for business.

    It is in many ways. And yet few Finns want to start their own business. Apparently they are happy with their position as employees getting paid nothing and so forth. Is this a paradox or what?

  • M

    the state knows its citizens are naive enough to work hard no matter what

    Why don’t you just let Finnpundit take over from there…

  • matti

    Funny suomi! The issue about the social security system in Finland is that, it is not a good onoe for Finalnd. It should be, if you are working, then fine if not, you are doomed. Know lot of people who dont ever want to work..after the degree, they annouce themselves as unemployed and suck the state dry!

    I think at a point, the Finnish state will not have enough resources to finance this social security lifestyle and people will be forced to earn what they spend..but I wonder when Finland will end up to that. Finns don’t like changes and they dont have it easily…so until then, suck the system!

  • TomiA

    Is it just me or is this discussion full of misunderstandings For example: As FRF said most salaries are determined by the market not by the welfare state (read: if IT people are paid “too little” it’s because there are “too many” of them). The salaries of most industrial workers had to be pretty much at the same level in the USA and Finland because productivity is at the same level which determines the levels of salaries in the end (this question is of course a bit more complicated but that’s the bottom line). Naturally the nurses are paid “too little” because there is a state monopoly, but this has nothing to do with such markets where there is no monopoly. And so on.

    Otherwise I think mjr hit the nail on the head.

  • Liber Al

    Freeridin’ Franklin wrote: “But seriously, Finland is a very good place for business.”

    It is, but only if you steer clear from employing others. I couldn’t imagine being anything other than sole proprietor under the current political climate and legislation.

  • Freeridin’ Franklin

    Liber Al:
    It is, but only if you steer clear from employing others. I couldn’t imagine being anything other than sole proprietor under the current political climate and legislation.

    For the second time: For every euro I make from my work, my employer makes two. Why the hell would he want to be a sole proprietor?

    A little thick, are we?

  • Freeridin’ Franklin

    matti:
    Know lot of people who dont ever want to work..

    And who’d blame them, with all the stingy-ass employers who won’t reward your hard work.

  • STP

    Finland is a good place for business?

    Say what?

    You can repeat that lie a thousand times and it will still not be true.

    Let me fix it for ya:

    Finland is a good place for price cartels and monopolies.

    They are building some houses close to mine.. Asking price is about 400 000 thousand euros.

    That is sick.

    If we follow the curve of the last recession. The price for those houses is going to be about 160 000 euros when we hit the rock bottom (recession similar to last).

    Now lets say a Finnish couple pulling 45 000 a year is going to buy it right now. They have to take a loan for 415 000 euros (15 000 goes for taxes).. Ok, it will mean they are going to pay 1751 Euros a month to the bank for 30 years.. :D Fun fun fun. Buy the car and live your life with 2000 a month for 30 years..

    In the US. That one nurse alone pulls 50 000 dollars. Even when you fix the exchange rate, you have 43000 euros. Then. Lets see about the purchasing power of her money. She can buy a new house that is similar to the 400 000 Euro one for 180 000 dollars. She can buy a brand new ford Focus for 14 000 dollars. Do not even get me started about the food prices..

    Now, lets count that she has a husband earning a very typical wage of 60 000 dollars.. Now we are getting somewhere..

    Lets say a recession comes. The Finnish couple is going to be paying 1750 a month for a house that is suddenly worth 288 000 dollars less than when they took the loan.. At this point in the last recession Finnish husbands were killing their own children and wives because they just could not deal with the sudden realization that they were going to lose everything.

    But no one feels symapthy for those that went bankrupt right? It was their own fault. Should be shot on sight?

    The American couple meanwhile could not lose nearly as much. The house price was not inflated to begin with. Even if it lost half of its value, they would still be only 90 000 in debt. Assuming they had not paid a penny of it. Lets say they had paid half when the recession comes. They would be 45000 in a hole. Not bad..

    Can you imagine American markets full of couples like I described above. With a lot of money left over.. What are they going to do with it? A lot of them invest it in funds, eat out (giving birth to a lot more fast food joints / jobs than in Finland) buy stuff left and right. Save for the collage fund..

    Have more babies.. Smile more..

    That is what America is about. About loose cash circulating in the economy.. About people carrying their own weight. About people feeling like they are worth something, instead of being just proverbial spit cups.

    But hey. Maybe we should enjoy the pain..

  • Freeridin’ Franklin

    They are building some houses close to mine.. Asking price is about 400 000 thousand euros.

    Seriously, you’re bitching and whining about the Finnish real estate bubble and extolling the virtues of the USA in this respect? Jeez. Do you have an internet connection? If you don’t, why don’t you go to one of the welfare-statist public libraries and look up some US real estate prices.

    In the US. That one nurse alone pulls 50 000 dollars.

    Of course, the nurse will be paying a student loan of maybe $100,000…

    Now, lets count that she has a husband earning a very typical wage of 60 000 dollars.. Now we are getting somewhere..

    Earth to STP, median household income in the US according to the US Census Bureau was $43,318 in 2003. But sure, 10M€ is a typical salary in Finland if you only count Nokia top management.

  • Freeridin’ Franklin

    Along with the anti-intellectual US bashers, Finland seems to have a problem with these US-worshipping ultra-naïve Kapitalist Klutz Kids. It would do both groups good to live and work in the US for a few years. Unfortunately, protectionist US immigration policies largely prevent that.

  • Freeridin’ Franklin

    Regarding real estate prices, something to cheer you up:

    http://patrick.net/housing/MrHousingBubble2.gif

  • Mara

    In the 90’s at least California (and I think some other south-western states) experienced a savings-and-loans crash very much similar to the Finnish one, and for similar reasons: the savings-and-loans had aggressively expanded their housing financing until the real estate price bubble exploded.

    In the worst hit areas the real estate prices dropped something like 30% and many people just walked out of their loans, because the loan was much bigger than the value of the real estate that was guaranteeing it. Consequently, those people lost their homes and damaged their credit for years. But going bankrupt in California doesn’t seem to be as lethal as it is in Finland. People seem to get on their feet quicker, and the general economy is dynamic in the sense that it picks up surprisingly soon even after large blows.

  • Freeridin’ Franklin

    But going bankrupt in California doesn’t seem to be as lethal as it is in Finland. People seem to get on their feet quicker

    Finland lacks the concept of personal bankruptcy. Being in debt is more serious business. All the more reason to keep cool in the current housing bubble, even if it’s mild in comparison to California.

  • STP

    Franklin.. I admit I did not take the student loans into consideration.. I know they can be as high as 200 000 for some people, but often they have scholarships that help to pay for your books etc.. I asked a friend.. She ended up being 60 000 in debt.. She paid it back almost all in the first year by staying at home and working full time.

    Sorry about going on about the housing bubble.. It is just.. To me.. It is kind of a neurosis. Like watching a volcano growing in the backyard. Knowing it is going to hurt a lot of people if the past will become the future..

    Ill try to stay away from this blog for a while now. . :)

  • Freeridin’ Franklin

    Sorry about going on about the housing bubble.. It is just.. To me.. It is kind of a neurosis. Like watching a volcano growing in the backyard.

    The last time the fall of the Soviet Union erased some 25 per cent of the GDP, or was it GNP, overnight. It would take a simultaneous American and Asian crisis (and a serious one at that) for the same effect this time. I doubt we’ll see an equally serious crash any time soon. Still, this is no time to buy a house.

    Ill try to stay away from this blog for a while now. .

    Aww, c’mon.

  • Jaakko

    It is sad that some people never think of anything than taxes and money. It is sad to just stand by watching how this western capitalism is turning our world into one big walmart.

    I’m making 1800 euros a month as a subway driver and I don’t go around bitching all the time how I should get MORE MORE MORE and MORE to the top of my pile. At the end, consumerism will kill us all.

  • http://finnpundit.blogspot.com Finnpundit

    If working for a company, don’t ever invent anything. You just end up working your ass off with your idea. Get your name first in the patent and get that wrist watch with the company logo presented to you in front of the colleagues.

    Oh, Antti! No, no, no, no, no! You set up a company, either in Bermuda, or Malta, or the Dutch Antilles, you assign your patents to that company, and you go traveling to the US with your paper-industry-engineering ideas, and meet up with investors. There’s such mad money available in the US, for all kinds of ideas, for any industry. All venture capitalists expect some 90% of their investments to be duds (VC money is actually play money: it’s only a fraction of their total portfolios). It’s that 10% that they’re hoping will bear fruit.

    For the recipient of that money, if the idea doesn’t pan out, the act of being in such a venture already opens so many doors to other possibilities that a possible bankruptcy is irrelevant. When I was in San Francisco in 2000, I saw a lot of stupid ideas get a lot of funding. Most of them went bust. But every one of those entrepreneurs landed on their feet, and they’re either pursuing the same ventures through different funding sources, or they’ve gone on to new ideas and new ventures. And the mad VC money is still there, salivating at the chance to give you some.

    And you don’t have to be in the US to access all this. You can stay in Finland. But you need to set up your financials and your ventures in places other than Finland. And with the interconnectivity of the internet, you can easily manage the ventures you’ve begun, without having to pay pennin hyrrää to the greedy Finnish state. (Hell, start an overseas trust fund for your kids: that way nobody needs to see anything).

    Believe me, there’s tons of interest in any kind of technology. It’s not that hard to make connections (well, at least in the US). Nobody cares if you come from money, or from a fine family. All they care about is whether you know the field that you’re talking about, and whether your future projections on your excel sheets make any sense.

  • Freeridin’ Franklin

    Finnpundit:
    There’s such mad money available in the US, for all kinds of ideas, for any industry.

    If it’s so easy in the land of milk and honey, I wonder why most people in the US are working for a living instead of just siphoning billions off the VCs. Are the worker-consumers stupid?

    When I was in San Francisco in 2000, I saw a lot of stupid ideas get a lot of funding. Most of them went bust.

    Lots of stupid ideas and loser companies got a lot of funding in 2000 in Finland, and a great many OK ideas and decent companies were spectacularly overvalued. Here’s a newsflash for ya: it isn’t 2000 anymore.

    All they care about is whether you know the field that you’re talking about, and whether your future projections on your excel sheets make any sense.

    Hmm. I thought that nothing had to make any sense. Are you sure you weren’t talking about the presidential elections when you mentioned stupid things getting a lot of funding?

  • Tom

    Phil,
    I’ve been working for about 18 years in Finland now, and experienced/ struggled exactly with the same you described.

    For about 10 years I’ve been “working like hell” and been angry about the missing compensation.
    Then I more and more concentrated on private savings and investments. Yes, it is possible in Finland, even without inheritance! Just take care spendings are constantly below income over long period of time and have good and versatale investment strategy and knowledge.

    I am in fairly good position at work but today I do not like much overtime and waste my thoughts with work related issues. Travel and sometimes long meetings belong to my job, but I comensate that (by my selves) by taking it easier (shorter) at normal office days.

    At the moment the capital income is for my wife and me almost the same as salary income. If some day my employer wants to get rid of me or I am too fed up with the job, it will not hurt finacially too much. It can even be a release. Because at the moment it is quite time consuming to take care of property and investments besides the job.

    Today status of job position is not very important for me. Highest priority is beeing finacial not in tight situation and financially independent.

    rgds Tom

  • http://www.axis-of-aevil.net/ hfb

    STP – Oh, no bubble in US real estate? You’re very wrong about that, especially in the Boston area. I purchased a house for just under $180k in 1986. It was a 1300 sq. ft. 2 storey colonial on a quiet street in a MIT/Harvard bedroom community suburb. It was nothing special and had a very small yard. When I sold it in 2002, my real estate agent said that it was a “lovely starter home” at $500,000. I bought the home myself before I married and when I was making a hefty six-figure salary. With what I make in Finland, even with the combined income of my husband, which places us well above the average income bracket, we couldn’t even think of being first-time home buyers without a substantial amount of savings. In the US, they’ll finance you out the ass to get to you buy and keep buying.

    What I want to know is, given the average salary statistics in Finland, who in the hell is buying all these 650k eur-1.5mill eur apartment in the city? I mean, you can’t even touch a shack in Espoo/Kirkkonummi/Sipoo for less than 500k eur. Why and how are people buying these places? I still don’t understand how salaries can be so low and everyday sorts of goods, including a place to live, be so expensive yet people seem to get by.

    There’s nothing wrong with making gobs of cash, especially in the 10th most expensive city on the planet to live in.

  • Tom

    Please look in http://www.oikotie.fi
    There are thousands of houses and apartments to be sold. About 98% are below 650 k eur.
    If you only look Helsinki as most expensive area there are still 85% below that price tag.

    If you take the 5% most expensive houses in any capital, the price will be out of range for most people.

    rgds Tom

  • antti (the redneck one)

    “I’m making 1800 euros a month as a subway driver and I don’t go around bitching all the time how I should get MORE MORE…”

    Congratulations on honourable profession, Jaakko. I worked for the same employer on the surface, driving tram about ten years ago. One of the best workplaces I have been. OK, there were drunks and raving maniacs as customers sometimes and ever tightening schedules, but it gave enough material for one volume of memoirs and usually a plenty of energy was left after the workday to pull your own projects. Should have stayed few years more.

    I think the money an sich isn’t the principal problem in this thread, but how the people should be rewarded for their work effort. Unfortunately they haven’t figured out any other ways to compensate people getting ulcers and burn-outs, although I have heard about some ships sailing out there with crews paid in food and alcohol.

    Actually one professor of mine had all the time these ventures, depicted by Finnpundit, going on. After some aeroplane crash, he was right away applying for U.S. patents and discussing his ice detector invention with the plane manufacturers. I don’t know all the details, but it ended up, at least, to be used in the wind turbine industry. If you go to doctor with a resilient flu, the doctor may check your sinuses with one of his devices.

  • http://finnsense.blogspot.com finnsense

    A few points:

    1) One shouldn’t moan about the higher salaries in the US than Finland. The US has a GDP per capita about 30% higher so it’s hardly surprising. Finland has higher salaries than Estonia but that’s not a criticism of Estonia’s tax structure or working hours.

    2) We should differentiate between paying lots of tax and being penalised for working longer hours. Phil’s argument doesn’t seem to be agaist paying lots of tax but against the fact that tax rates do not take hours worked into consideration. I hate to say it but if that is his point, it is a good one. I’m all for taxing people getting €150 an hour heavily to fund a generous welfare state but we should encourage some people to work hard (i.e. people without young kids).

    3) I’ve never heard of a Finn burning out but the I don’t work in IT.

    4) Like Jack Welch said, indispensible workers who are effective and create a decent atmosphere in the workplace choose their working conditions. No boss can afford to lose a really effective worker. They are just too rare. The bottom rungs of any ladder are unpleasant but once you get on the way up and show your worth, you can work as much or as little as you like.

  • Liber Al

    Freeridin’ Franklin: “For the second time: For every euro I make from my work, my employer makes two. Why the hell would he want to be a sole proprietor?”

    The intellection answer to your question would be: Izzat so?

    Ever tried it? I didn’t think so. Simply put, your employer’s monthly net salary is not two times the sum of all hir employees’ monthly net.

    You are forgetting many types of costs involved in employment. In particular the immaterial ones. Life is short and one of the least rewarding ways to spend it is in hiring and firing people. I, for one, wouldn’t employ a person even if I did make the employee’s salary * 2 off of hir. I have tried it and I made that much (more in fact) but it still wasn’t worth the trouble in the long run.

    In this country employment is legally a more bonding relationship than marriage (I am serious). The amount of regluations and rules associated with employment is absurd. Not to mention the social stigma — you are practically regarded as a crimilar the moment you take the responsibility of other people’s income. (Think UPM for example.)

    Half jokingly, one has to question whether it would be simpler for our country if employment was outright illegalized. For one, that would free an enormous amount of unproductive resources from the government and public sector in general. Our whole trade union system could be dismantled. Eduskunta no longer needed to work full year when most of the laws passed have been one way or another involved with employment anyway. All these people could finally start doing something honest with their lives.

    Quite simply, employment and unemployment are political concepts. Employment has nothing to do with personal value fulfillment or market dynamics. It’s just one more gimmick in wealth distribution. Except that this particular gimmick largely prevents wealth from being generated in the first place, so one should regard it more as energy distribution. It keeps the less talented faction of the nation occupied and busy.

  • Keksi

    http://www.talouselama.fi/doc.te?f_id=872204

    good article. make sure to check the comments as well (finnish only, sorry!)

  • http://www.axis-of-aevil.net/ hfb

    Tom – it’s not just the upper 5% as the market has gone completely nuts. There’s a just about 80 sq. m attic apartment in my building, which although it is quite central is nothing fancy is asking 650k euro. We didn’t pay anywhere near that for our 100+ sq. m. apartment in the same bld. three years ago. My husband and I have been looking at houses in the Helsinki area and we’ve found nothing worth buying under 450k euro and houses in that range are usually either in Porvoo or BFN Kirkkonummi.

  • Tom
  • STP

    That house is a stonethrow away from Ring 3, at the very edge of Helsinki, way closer to Tikkurila than downtown.

    Hell, I could probably pocket a cool half a million us from my home.. So, hey what am I saying. . THESE HOUSES ARE UNDERVALUED! :D My house should be worth at least 2 million dollars! I wont negotiate about that!

    God damn right it is a beautiful day..

  • Tom

    I am not a house seller.
    But this one is much closer than Porvoo or Kirkkonummi.

    Tom

  • Tom

    In London, Paris or NY you won’t find any good condition house in walking distance to downtown below 5-10 Mio EUR.

    Tom

  • http://www.axis-of-aevil.net/ hfb

    Yeah, anything under 450k within KehaIII has something wrong with it. We saw one we liked for 425k…found out through the wonders of google maps and the city that the backyard would be relandscaped into KehaII off/on ramp in a few years along with a giant power line the real estate agent conveniently left out of the picture. I feel badly for the folks who wound up buying that place as they surely couldn’t have known about the KehaII expansion plans.

    And, Tom, at over 400k, I expect either a really find house with plenty of amenities or some land with it….I don’t particularly want to be able to watch my neighbours taking a dump from my kitchen windown. I still don’t understand why and/or how people are forking over this kind of cash for homes in Helsinki.

  • http://www.axis-of-aevil.net/ hfb

    Tom…don’t take this the wrong way but….this ain’t London, Paris or New York.

  • Freeridin’ Franklin

    Liber Al:
    Ever tried it? I didn’t think so. Simply put, your employer’s monthly net salary is not two times the sum of all hir employees’ monthly net.

    Actually, it pretty darn close is, assuming that other employees make about the same I do. This is public information, you know. We’re talking about gross salaries of 40-50k vis-a-vis 300k.

    In this country employment is legally a more bonding relationship than marriage (I am serious). The amount of regluations and rules associated with employment is absurd.

    Perhaps, but you can happily ignore them as long as your employees are not SAK members. It’s not like anyone will care.

  • Freeridin’ Franklin

    hfb:
    I still don’t understand why and/or how people are forking over this kind of cash for homes in Helsinki.

    Hey, it’s a bubble. It’s not supposed to make any sense. People are desperate to get into the market as “tomorrow it will be even more expensive”. The same thing was going on in 1988-90. The market was actually cooling already before the recession hit and things turned really nasty. Check this (PDF) for real price development (Kuvio 3). Housing prices have long been cyclic and highly volatile in Finland, especially in the Helsinki area. Buyer beware.

    Instead of buying that dream home by Kehä III under the power lines, hold on to your downtown flat, or if you’re really adventurous, cash in on the bubble and rent for a few years…

  • Liber Al

    hfb, I second Freeridin’ Franklin’s opinion regarding the housing bubble. It has been predictably cyclic for a long time. The interesting question is why do people still enter the market at the obvious high amplitude point? In addition to the point(s) already mentioned, there is a cultural thing involved. In Finland, renting is somehow frowned on. Even when the financially savvy thing to do would be to rent for awhile (before getting into the market), cultural programming causes people to buy nevertheless — and get financially burned in the process.

  • Nirva

    Perhaps, but you can happily ignore them as long as your employees are not SAK members. It’s not like anyone will care.

    Wow, for once I’m actually agreeing with you. SAK members are pretty much untouchable but the rest of us… we’d better keep the boss happy.

    I also have to agree with Phil on the crippling effect of the welfare state. Our socialist system depends on the same people it’s trying to get rid of: people with money. So as a result even our middle class has to pay depressingly high taxes.

  • Kai

    Phil,

    Don’t spend too much time worrying about people who milk the system…they are really actually quite few, and your payment to them is minimal….
    GET BACK TO WORK!

  • Meghan S.

    “Perhaps, but you can happily ignore them as long as your employees are not SAK members. It’s not like anyone will care.”

    This is assuming once their probation time is up they don’t spend the entire day hovering by the coffee machine, sucking it down by the potful and letting everyone else (i.e. their boss, the only person really invested in the business) do all the work. For a “Lutheran” work ethic, I just don’t really see the work ethic. Granted, I have only lived here under a year. But good lord….

    For the rest of us that work our asses off, it’s not so much the wanting more money, I just want a nicer quality of life to spend more time with family and friends, without feeling like I want to shoot something after leaving work.

  • ouj

    “Now lets say a Finnish couple pulling 45 000 a year is going to buy it right now. They have to take a loan for 415 000 euros (15 000 goes for taxes).. Ok, it will mean they are going to pay 1751 Euros a month to the bank for 30 years.. Fun fun fun. Buy the car and live your life with 2000 a month for 30 years..”

    Yeah, except that a couple pulling 45000 euros together (or even 90000) is not going to buy a house costing 400000 euros, let alone even dream of a loan for 415000 euros.

    People who buy 400000 euro houses are people who can afford it. It’s as simple as that.

  • Freeridin’ Franklin

    Yeah, except that a couple pulling 45000 euros together (or even 90000) is not going to buy a house costing 400000 euros, let alone even dream of a loan for 415000 euros.

    In most new developments, the loan is divided between the buyer and the housing company. Hence the difference in the selling price and the total price. 400,000 is actually a pretty typical total price for a new semi-detached home in Espoo, for example. The selling price can be as little as a third of that. The banks are all too happy to dish out a loan of 133,000 to just about anything with a pulse.

    What, do you imagine that all first time buyers in the Helsinki area are millionaires? Take a reality check by running a few searches on etuovi.com.

  • ouj

    “In most new developments, the loan is divided between the buyer and the housing company. Hence the difference in the selling price and the total price. 400,000 is actually a pretty typical total price for a new semi-detached home in Espoo, for example. The selling price can be as little as a third of that. The banks are all too happy to dish out a loan of 133,000 to just about anything with a pulse.”

    Sigh.. You’ve gotten things a little bit mixed up.

    Myyntihinta (selling price) is what the seller of the apartment wants – it may or may not contain the debt of the housing company (“velkaosuus”). In many cases the previous owner(s) has already paid the housing company debt and thus, myyntihinta and “velaton myyntihinta” (selling price and debt of the housing company combined) are the same.

    However, if that is not the case (common with new apartments), selling price can be, for example, 135000 but the debtless selling price can be a LOT more depending on how much of housing company’s debt is still unpaid. And here is the important point: the remaining housing company’s debt transfers to the next (or new) to-be-owner automatically.

    Just an example from etuovi.com, a new 100,5m^2 semi detached house in Espoo:

    Velaton hinta: 248471,00 €
    Myyntihinta: 74175,00 €
    Velkaosuus: 174296,00 €

    The apartment is not yours if you’ve got 75000 euros in your pocket – it’s yours if you have 250000 euros – that is the total price you’ll pay in the end. If you don’t have any savings, you need a loan for 250000 euros… and “just a pulse” won’t do it.

    “What, do you imagine that all first time buyers in the Helsinki area are millionaires? Take a reality check by running a few searches on etuovi.com.”

    Maybe not millionaires, but people buying apartments which cost 400000 euros (velaton myyntihinta) are pretty well off.

  • Freeridin’ Franklin

    The apartment is not yours if you’ve got 75000 euros in your pocket – it’s yours if you have 250000 euros – that is the total price you’ll pay in the end. If you don’t have any savings, you need a loan for 250000 euros… and “just a pulse” won’t do it.

    It is you who has things a little mixed up. You only need to apply for a loan (and have collateral) for the selling price. Of course, you also need to afford the housing company mortgage payments but that is a different thing altogether.

    What do you imagine being the point of a housing company loan if you need collateral for the entire price?

    Well, “just a pulse” may be a bit of an exaggeration. If you just call the banks, they might give you the cold shoulder, but I know some people who got a loan with zero savings and zero collateral, including a couple with only one breadwinner.

  • http://frwhiskey.diaryland.com :Mary

    I’m a Finnfan from back in my 1980′s hitchhiking days, from Helsinki to Rovaniemi and round and round a few times. Last year I went back after a 20-year break from Finland. I met three people right off the bat with Master’s degrees who live on welfare, claiming to be “unemployed”, which keeps them sitting pretty, doing nothing, with no expectation that they ever will.

    As an American, asking them what they really thought that they MIGHT do in the future – after a steady resistance to employment for years – they shrugged, for who cares? Sucker workers keep on paying them to sit around and do little, or even lets them travel abroad! (through a little sneakiness, hiding that they are out of the country…) In two cases, it was women in their 40′s having kids, one by adopting a girl from South China, getting five years off work, fully paid, automatically.

    Crazy country. No wonder no one smiles on the Metro – they’re slaves for the the Somalis, the dropouts, the other welfare bums.

    Mary

  • http://www.jadeisabaddog.blogspot.com/ Hopeapaju

    Still crazier things can happen. I cannot believe that there can be so many different stories found in the web and discussion about Finland’s social welfare system. Well, maybe, I never really paid so much attention to it in all these 14 years here, until now.
    Here is our case,
    http://www.jadeisabaddog.blogspot.com
    Pracitally KELA made a mistake and does not want to correct it, so our child has to suffer.

    It has been also in the Finland forum. http://www.finlandforum.org/bb/viewtopic.php?t=23415

  • isan

    you simply have no idea what you’re talking about…

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