Swedish government unveils measures to fight unemployment

In August 2009, the government announced parts of its employment policy programme for 2010 and 2011. The planned measures comprise an investment of about €810 million in educational programmes and vocational training courses, as well as labour market activation measures for unemployed people. The trade unions have criticised the measures for being insufficient to combat the expected high unemployment rates due to the recession in the coming years.

Background

The Public Employment Service (Arbetsförmedlingen) forecasts that in 2010 about 11% of the population will be unemployed in Sweden. More than half a million people or 9.8% of the population were registered as unemployed in June 2009, according to Statistics Sweden (Statistika Centralbyrån, SCB).

On 26 August 2009, the government made an early announcement of its employment policy measures to prevent long-term unemployment in general, as well as to reduce the high level of youth unemployment due to the economic recession (SE0908019I). Overall, the government will invest SEK 8.4 billion (about €810 million as at 8 November 2009) in the next two years with the aim of easing the effects of the recession. Further details were given when the government presented its Budget Bill 2010 to the Swedish parliament (Sveriges Riksdag) on 21 September.

Since the ruling centre-right government took office in 2006, the number of places in different employment policy programmes has been reduced and is at a historically low level today; this includes enrolment in municipal adult education programmes, work experience placements for unemployed people and employment allowance orders. In light of the recession’s impact on the labour market, however, the government has prepared a package of measures that augments to a large extent the traditional measures for unemployed people.

New employment policy measures

The first part of the employment package, representing an investment of SEK 4.5 billion (€434 million), will support the expansion of existing education programmes. The objective is to enable 23,000 new enrolments in education programmes, of which 10,000 enrolments will be at universities and higher education level, 10,000 in municipal adult education programmes (Kommunal vuxenutbildning, Komvux) and 3,000 at the newly established Swedish National Agency for Higher Vocational Education (Myndigheten för Yrkeshögskolan). The latter agency administrates government grants and supervises all higher vocational education in Sweden, including advanced vocational training schools for adults, in order to better adjust such training courses to labour market demands in terms of skills needs.

The second part of the package, including an investment of SEK 3.9 billion (€376 million), will subsidise different labour market measures for unemployment people, such as 54,000 new activities and/or enrolments in programmes for long-term and short-term unemployed people. Some 40,000 places will be made available in a new labour market activation programme called Lyft (‘boost’). This programme offers unemployed people the chance to take up temporary work, such as repairs or maintenance, at county council or municipal schools, care centres, cultural institutions or in forestry. The purpose of Lyft is to enable unemployed people to remain in contact with the labour market. In addition, 12,000 places will be created in work placement schemes, vocational training and coaching programmes. The government also plans to create an additional 1,000 new places in short-term education programmes that will make it easier for unemployed people to find a new job by developing their practical skills. Furthermore, some 1,000 places will be made available at adult education centres (Folkhögskolor).

Reactions of social partners and opposition party

The economic spokesperson of the social-democratic opposition party, Thomas Östros, criticised the government. According to an article in the Swedish daily newspaper Svenska Dagbladet on 27 August 2009, he stated that the measures are well needed but that they come too late, and that the measures are not powerful enough to combat the high level of unemployment, as well as the effects of the recession.

The trade union for professionals in the private sector Unionen also stated in a press release on the same day that the government package of employment measures is not ambitious enough. Unionen estimates that a further 300,000 people will become unemployed by 2011. Therefore, the trade union believes that the measures presented by the government are insufficient and disproportionate in relation to future needs. Unionen is also questioning the type of investments and has demanded other kinds of activities, such as those enabling growth and continuous vocational training.

The Swedish Trade Union Confederation (Landsorganisationen, LO) welcomed the government measures and investments; however, LO also voiced criticism that the provisions are not far reaching enough and come too late. Both LO and Unionen demand an increased number of places available in short-term education programmes that can ease the recessionary pressures on the labour market. The President of LO, Wanja Lundby-Wedin, highlighted that the government measures are insufficient to help the large number of young people in unemployment. LO also criticises the new Lyft initiative and is concerned that collectively agreed minimum wages will not be applied for work placements under this initiative, according to an interview by the Swedish News Agency (Tidningarnas Telegrambyrå, TT) on 26 August 2009.

The Confederation of Swedish Enterprise (Svenskt Näringsliv) has not yet commented on the package and intended to wait until the government presented its budget bill for 2010 at the end of September. However, the employer confederation is generally more interested in measures targeted at growth and reforms of the Employment Protection Act (Lag (1982:80) om anställningsskydd) from 1982 than in employment policy measures.

Karolin Lovén, Oxford Research

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