Government launches job package to tackle social exclusion
As part of the spring Budget, the government is proposing a special employment package to overcome social exclusion and make it easier for more people to enter the labour market. The job package is targeted at three main groups: long-term unemployed people, young people and migrant workers who have just arrived in the country. However, some organisations are concerned that this measure will further widen the economic gap between social groups.
Target groups and defined measures
The 2007 spring budget (in Swedish) provides for a special employment package targeting various groups of the population by offering new opportunities to enter employment. This measure:
- gives long-term unemployed people and people receiving social assistance a so-called ‘job and development guarantee’ (jobb- och utvecklingsgaranti);
- provides young people with the guarantee of a job (jobbgaranti för ungdomar) and lowers employers’ social contributions for this category of worker;
- defines an integration package including new ‘step-in’ jobs, in which work and language training are combined. This will increase opportunities for newly-arrived migrant workers to obtain work (instegsjobb för nyanlända invandrare).
Job and development guarantee for long-term unemployed people
The guarantee of a job as well as further development opportunities for long-term unemployed people will take effect on 2 July 2007 and thus replaces the present ‘activity guarantee’. This programme aims to develop individually designed measures to get participants into employment as soon as possible. The reform includes the following three phases:
- participants begin with intensified job seeking activities including personal coaching;
- participants then have access to a wide range of unemployment policy programmes, such as job training, a work experience placement or a subsidy for employment and skills development;
- after 450 days of participating in this programme and if participants have not been able to obtain work, they will be assigned an ‘appropriate’ job that corresponds to their personal skills. In other words, these participants are practically forced to take up a job that is ‘useful for society’.
Participants in the job and employment guarantee programme, who have unemployment insurance, will receive compensation corresponding to 65% of their previous wage; this sum amounts to a maximum of SEK 680 (about €72 as at 18 June 2007) a day. Others will receive SEK 223 (€23) a day for a period of 450 days at most. The government estimates that this income guarantee applies to 62,000 people and will cost approximately SEK 9.8 billion (€1.04 billion) in 2008. People with functional disabilities that reduce their capacity to work represent an important target group in this regard. To boost employment opportunities for this group, the government will increase the disabled employee subsidy and the number of places at Samhall AB, which is a state-owned company providing meaningful work that furthers the personal development of people with disabilities.
Job guarantee for young people
The guarantee of a job for young people aged 16–24 years will be introduced on 1 December 2007. This measure will be activated once a young person has been applying for jobs for over three months. The job guarantee starts with intensified support for young people in their search for work. Subsequently, the programme includes a combination of active matchmaking tasks and increased efforts to place these young people in an adequate job, such as a work experience placement or further education.
Young people, who qualify for unemployment benefits, will receive a level of compensation up to 70% of their previous wage after a hundred days. After an additional hundred days or more, this rate will reduce to 65%. Those young people who do not qualify for unemployment benefits will receive a so-called ‘development insurance’ equivalent to student aid. This reform measure is estimated to involve 30,000 young people and will cost SEK 2.8 billion (€297 million) in 2008. In addition, the government also aims to reduce the social contribution (payroll tax) by 50% for employers who hire young people aged between 18 and 25 years; this should facilitate easier labour market entry for young people.
Step-in jobs for newly-arrived migrant workers
Step-in jobs aim to:
- speed up the process for migrant workers to enter employment by providing incentives for employers to hire these workers;
- prompt municipalities to offer ‘Swedish for immigrants’ (Svenskundervisning för invandrare, sfi) classes at an early stage;
- combine the search for a job with studying Swedish.
The government will subsidise these step-in jobs, with 75% of wage costs being provided for in the private sector and 50% of such costs being covered in the public sector. Additionally, the government will strengthen the employment service’s resources to increase migrant workers’ employment skills and introduce exams for these workers.
Commentary
The largest opposition party, the Swedish Social Democrat Party (Socialdemokraterna), and the Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO) are concerned that these measures carry the risk of polarising employed and unemployed people further. They also consider that such measures will increase the economic gap between social groups. On the other hand, the Confederation of Swedish Enterprise (Svenskt Näringsliv) perceives the measure as a positive step towards encouraging more people to work and businesses to employ members of the target groups. The confederation believes, however, that the government has to go even further by improving the process of matching people’s skills to job requirements and to reform the unemployment insurance system.
Jenny Lundberg, Oxford Research