Opposition proposes unemployment remedy

Sweden’s opposition parties want to offer incentives to employers to recruit the long term unemployed, the early retired and those on long-term sick leave.

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Presenting their shadow budget today, the centre-right parties said that companies which employ people who have been outside the labour market for more than one year should be exempted from paying social security contributions for those employees.

The duration of the exemption would correspond to the length of time the person has been unemployed, up to a maximum of five years. In the case of young people from 20-24 years old, the minimum period of unemployment is 6 months and not one year.

The Moderates’ leader, Fredrik Reinfeldt stated that “it should be more attractive to work instead of depending on state benefits”. The Moderates also advocated abolishing tax altogether on income under 26,000 SEK and a significant reduction in marginal tax rates on income up to 300,000 SEK. They plan to finance these measures through reductions in social security benefits. They estimate that their proposals will create between 190,000 and 260,000 additional jobs.

The Liberal Party leader Lars Lejonberg used the opportunity to ridicule government ministers’ claims about Sweden’s economy.

“We hear from the government that it is going better for Sweden than for many other countries. Then it is incomprehensible that we have been in the same position in the international prosperity table since 1994,” he said.

Lejonborg is critical of what he says are the misleading unemployment figures which greatly underestimate the real level of unemployment. The open-unemployment figure of 5% rises to 15-20% if those on job centre schemes, sick leave and early retirement are factored in.

The reaction from the government was swift. Finance Minister Pär Nuder described the proposals as a “PR bluff” to disguise the fact that the non-socialists could not agree on a common budgetary proposal.

Anders Bengtsson, a Social Democrat MP from Skåne, told The Local that the there was “nothing new” in the opposition’s proposal. He believes that more people should be employed by the municipalities to provide better health care. He also suggested that the government’s plan to invest more in training and research will create more jobs.

However Hans Lindblad, deputy head of the Moderate party’s parliamentary office dismissed Pär Nuder’s remarks. “The government has no idea how to solve the unemployment problem whereas we have a clear policy for creating jobs,” he said, adding that the Moderates proposal to cut social security benefits to 65% is higher than the current level of 64% that the government allows for early retirement.

Industry lobby group Swedish Enterprise welcomed the proposal, “in so far as it helps people who are having difficulty in rejoining the labour force. It is good that these sorts of issues are being debated” said spokesman Per-Lennart Berg.

Sources: Dagens Nyheter, Svenska Dagbladet

David Murphy

David Murphy is managing director of Word of Mouth Communications