Employment Minister explains government’s commitment to “work first” labor policies

Following an introduction by AmCham Managing Director Berit Salheim, the Minister offered some background on the formulation of current government employment policies. He recalled that the results of the 2002 parliamentary elections sent the Moderate Party a clear message. Having lost roughly one third of its seats in parliament, the party responded by conducting a full review its policies under Littorin’s tenure as secretary general. The result was a three point platform for 2006 focused on reducing unemployment and facilitating entry into the labor market.

“Work must always pay,” Littorin told the audience of about fifty AmCham members and guests for the event.

To that end, the government set out reforming a unemployment insurance program which Littorin described as all too generous.

“It was quite ridiculous, actually,” he said, describing cases in which people could earn more staying home and collecting benefits than they would going back to work. 

Reforms have focused therefore on creating incentives that entice people back to the work force and protect against abuse of what is meant to be a transitional insurance program.

In addition to ensuring workers see employment as a worthwhile endeavor, the government has also worked to make it cheaper and easier for employers to hire new employees, especially newly arrived refugees and the long-term unemployed. The government has also undertaken a reform of Sweden’s National Labor Board to streamline operations and focus on matching job seekers with available jobs.

“The National Labor Board had become the scrap pile of labor policy,” said Littorin.

By restructuring the way the National Labor Board functions and focusing on the goal of matching job seekers with existing opportunities, the government hopes the organization will become more effective in moving people into the workforce.

Nevertheless, Littorin was candid regarding public reactions to many the reforms thus far.

“The changes have been hugely unpopular,” he admitted.

Littorin reiterated that, despite a few bumps and a somewhat less rosy economic outlook for 2008-2009, Sweden’s labor market is the strongest it’s been in thirty years. People are moving into the labor market at a record pace, he explained, and unemployment has fallen faster than in any other OECD country.

“Everything we are doing today is to get people into the labor market, both by pushing and pulling,” he said. “We’ll continue with our ‘work first’ program right up to the elections in 2010.”

The presentation was followed by a question and answer session which covered a wide range of topics including current opinion polls, additional support for helping immigrants enter the workforce, facilitating the attraction and retention of highly skilled foreign workers, intellectual property rights, and the effects of globalization on the Swedish economy.

The event was made possible with the help of the Sheraton Stockholm Hotel and Fair Unlimited.

 Written exclusively for AmCham by David Landes