Government proposes economic measures to reduce unemployment

The Swedish Government presented a bill to Parliament in April 1997 on the guiding principles for its economic policy. A major proposal is that SEK 8 billion is to be invested in jobs in municipalities and county councils, and that the so-called "Kalmar model" should be adopted on a nationwide basis in order to reduce unemployment.

In its bill, presented to Parliament on 15 April 1997, the Government states that the policy of austerity which has been in operation for last few years has been so successful that it is now possible to focus more on its most important goal - to halve the rate of unemployment to 4% before 2000.

The Government concludes that it would be unacceptable to continue with an economic policy of cutting jobs in the public sector. It therefore intends to allocate an extra SEK 8 billion to municipalities and county councils to invest in health care, geriatric care, childcare systems and schools.

Another proposal is that the so-called "Kalmar model" is put into practice throughout Sweden until the end of 1998. This model is named after a municipality in the south of Sweden. It means that public employers are able to recruit unemployed people to "raise the quality" of the employers' activity without paying them more than a fraction of a normal wage. That is possible because they retain their unemployment benefits. In return, the employers have to offer any short-term temporary vacancies - where, for example, full-time employees are away from work because of holidays, general absences, sick leave and so on - to the "quality raisers", and during these periods these "quality-raisers" must be paid at the full rate specified in the relevant collective agreement.

The Government also suggests that long-term unemployed persons over 60 should be able to keep their benefits without having to look for a job until the end of 1997. This would allow employment agency officials more time to help young people. Later this year the Government will also propose that workers between 63 and 64 will be offered a severance payment if they leave their jobs and the employer recruits a young, long-term unemployed person in their place.

The reactions of employers and unions to the proposals vary. The Swedish Trade Union Confederation (LO), grouping blue-collar unions is positive, while the Swedish Employers' Confederation (SAF) claims that the proposals are no more than cosmetic. The opinion of the two confederations for salaried employees, TCO and SACO, lie somewhere in between.