Trade unions and Social Democrats agree on unemployment insurance

As a result of a new agreement on unemployment insurance, the governing Social Democrat Party has yielded to criticism from the trade unions.

One of the continuing quarrels between the Social Democrat Government and the largest trade union confederation, the Confederation of Trade Unions for Blue-Collar Workers (Landsorganisationen or LO), appears to have been settled by an agreement on the overall features of the unemployment insurance system, presented on 12 February. Formally, the Government is not involved in the settlement, but the details of the settlement were presented in a press release from the Ministry of Labour and in person by the Minister of Labour, Margareta Winberg, together with LO's vice-president, Wanja Lundby-Wedin.

Unemployment insurance has undergone many changes in the last few years. Some of the changes have been carried out in order to help government finances, since to a large extent the insurance is financed by the state. Other changes have been justified by the alleged malfunction of the system. It is no exaggeration to say that the policy of the governing Social Democrats has been somewhat inconsistent. In June 1996, for example, the Government proposed that a person must work at least half time for at least nine of the previous 12 months in order to qualify for unemployment benefits, and that nobody should be allowed benefits for more than three years. In November 1996, however, the Social Democrats in Parliament voted, with the Government's consent, for the postponement of these changes, which had been already decided but had not yet come into force.

Most of the changes have been unpopular with the trade unions. The fresh settlement implies that the Government has yielded to some of their criticism, and that some of the postponed changes will never come into force. Under the deal, unemployment benefits will be raised from 75% of previous income to 80% as from 1 October 1997. Workers will qualify for benefits if they have worked for at least 70 hours a month in a six-month period. The question now remains of what is going to happen to those who are still unemployed after three years; this will be considered by an official committee, as will the question of benefits for those who are part-time unemployed.

Further details will be drawn up in close cooperation with the Confederation of Trade Unions for Professional Employees (Tjänstemännens Centralorganisation, or TCO) and the Centre Party, and presented in government bill on 14 March.

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