Personal educational accounts may complement collectively agreed measures

In August 1997, officials from four Ministries met to discuss the possibility of drawing up a bill proposing Government measures to stimulate learning in working life. The major labour market organisations are all in favour of some kind of personal accounts for educational purposes, but opinions differ considerably on how they should be financed and what they should involve. Should it be a voluntary system based on the individual's own saving, or an obligatory system financed by a payroll tax?

Since 1975 all Swedish employees have been entitled to leave of absence for educational purposes, according to the Act on an Employee's Right to Educational Leave. The employer can only defer the leave requested within certain limits. The nature of the education is left entirely to the discretion of the worker as long as it is not purely private studies, and there are no restrictions on the duration of the leave. If employees want to return to work - after completion of their studies or prematurely - they are granted the same position as regards working conditions and employment terms as if they had not been absent.

The Act has been of great importance, especially during the 1970s and the 1980s, encouraging employees to improve their skills, and even qualify for new professions, because they know their employment is secure. It has, however, not been utilised very much by the categories that the legislator primarily had in mind, namely those who left school and took up employment without pursuing any further education. Many middle-aged and older blue-collar workers fit into this category. On the contrary, many salaried employees and others who are already comparatively well educated have tended to take advantage of the Act's provisions. There may well be economic reasons for this.

Blue-collar workers also do not have the same opportunities of employer-financed training as their salaried counterparts. In 1996 for example, 34% of the members of the unions affiliated to the Swedish Trade Union Confederation (Landsorganisationen, LO) took part of some kind of staff training, compared with 57% of the salaried employees in the Swedish Confederation of Professional Employees (Tjänstemännens Centralorganisation, TCO) and 64% of the graduate white-collar workers in the Swedish Confederation of Professional Associations (Sveriges Akademikers Centralorganisation, SACO).

Collective agreements on training

In the last few years there has been an increasing awareness of the fact that all workers need, and should be entitled to, recurrent training. Several sectoral collective agreements signed in the 1990s contain framework provisions that oblige individual employers and company trade union branches to conclude local collective agreements on "competence development". Few of the agreements, however, mention anything about the extent or content of the training measures. The impact of these regulations thus very much depends on the commitment of the local parties themselves.

Nevertheless, the so-called "Visby agreement" on wages and general terms of employment concluded in January 1996 by the Graphical Workers' Union (Grafiska Fackförbundet) and the Graphical Employers' Association (Grafiska Företagens Förbund) is particularly noteworthy. It aims to facilitate the structural transformation of the graphical sector and is designed exclusively for companies which are determined to benefit from the growth of the media market and increase their supply of products and services in the media sphere by assimilating new information technology. The agreement offers the employers more flexible rules than the ordinary agreement for the printing industry. In return the company is obliged to map out every individual worker's education and qualifications in relation to the different tasks at the workplace, after which the local parties are expected to draw up a plan for the continuing training of employees. During a trial period that expires in March 1998, the central agreement guarantees every worker at least four days of training at the employer's expense.

State measures

The aim of granting all employees access to recurrent training cannot, however, be attained by the labour market organisations alone. At the beginning of 1997, an official committee submitted a report for consideration by trade unions, employers' organisations and other parties concerned, which discussed what the state could do to stimulate learning in working life (SOU 1996:164). One of its proposals is that workers themselves should have the opportunity of saving money in personal "competence accounts" with a respite from taxation until the account is used. The employers should not contribute. Another idea is that companies might put aside money with a respite from taxation when there is a boom, to use for training its employees in times of recession.

In August 1997, officials from four Ministries began to consider the options outlined in the committee's report with a view to drafting legislation. It emerged that the major labour market organisations are all in favour of the idea of some kind of personal accounts, but opinions on how they should be financed and work in detail vary considerably.

The private sector Swedish Employers' Association (Svenska Arbetsgivareföreningen, SAF) on the whole supports the system outlined by the committee, provided that it is absolutely voluntary. The Municipal Workers' Union (Kommunalarbetareförbundet), however, characterises it as a "luxury system reserved for those who can afford to study anyhow", and many trade unions fear that it would lead to increased social injustice.

LO has a detailed proposal of its own, under which personal accounts for all employees should be financed by a payroll tax. Since the workers themselves are paying for them by accepting smaller increases in pay, the accounts should follow the individuals and not be linked to a certain employment relationship or a certain sector. The state should contribute with a basic payment to each account, so the system could begin to come into operation with the minimum of delay. The state might also make deposits linked to unemployment benefits to the accounts of the unemployed, in order not to exclude them from the system.

Commentary

There are high expectations of the Government's proposal for a system of personal accounts for educational purposes. As well as seeing such accounts as a matter of justice, LO also regards them as necessary if the members of its affiliated unions are to accept small raises in nominal wages in the present situation, where many companies are making large profits.

The Government itself - facing the Social Democratic Party conference in September and the general elections in 1998 - is eager to find a solution without delay, but the work has only just begun, and in the middle of August the political leadership had not yet given any guidelines to the officials handling the matter. One particular problem is that the proposals acceptable to the major trade unions are very expensive. Swedish workers may still have to wait before expressions like "life-long learning" and "continuous competence development" become reality. (Kerstin Ahlberg, National Institute for Working Life)