• Sweden's news in English
 

Sweden's labour costs 'distressingly high'

Published: 27 May 2014 14:31 GMT+02:00

Labour costs have been escalating in Sweden at a quicker pace than they have in the rest of western Europe and the eurozone, and the increasing strength of the krona has compounded the problem, a report by employer group Teknikföretagen stated on Tuesday. 
 
"Swedish industries operate in a global market characterized by tough international competition," Teknikföretagen economist Anders Rune wrote in the report.
 
"The labour cost status is a key factor in determining where production will be located. It's very concerning that the costs in Sweden are rising so quickly in relation to other nations."
 
In Sweden the average hourly cost of labour is 342 kronor ($51.65), compared to a western European average of 297 kronor ($44.85) and a eurozone average of 280 kronor ($42.28). The report shows that only Norway, Switzerland, and Belgium have higher labour costs than Sweden. These statistics are on par with those of a March report which estimated an hour of Swedish labour at 359 kronor.
 
Western European labour costs include the UK as well as high-wage Sweden, Switzerland and Norway, and are generally higher than those of the eurozone. The report points out that Sweden's costs are "worryingly high". 

“If you ask me how the situation will look many years from now, I'd say I was worried," Rune told The Local.

"Employment in the industrial sector is declining, and that is because of the costs. We (Teknikföretagen) and our partners in the labour market have made complaints to the Swedish Riksbank, which has for a long time held steering rates high above those of the euro, further strengthening the Swedish krona. This makes it hard to compete."

The krona's value dropped during the financial crisis in 2009, but has climbed since then, particularly against the euro. The krona rose 8.8 percent in value against the euro between 2011 and 2012, and climbed another 0.7 percent in 2013.

Niklas Hjert, head of negotiations at Unionen, one of Sweden's largest labour unions, agreed that the strength of the krona is a significant contributing factor to high labour costs in the country.

"Labour costs are of course something that we look at very closely when negotiating," Hjert told The Local. "In our last round of general negotiations in 2013 we didn't ask for very high wage increases because we took labour costs into consideration. But we could not foresee how the krona would continue to strengthen. It's actually quite unusual. Sweden is a small country and usually the krona weakens during rough periods."

Hjert added that the unusually high labour costs will have to be a focal point of Unionen's negotiations in 2016. However, he pointed out that the high costs cannot be pinned entirely on currency rates.
 
"The strength of the krona is of course a very important factor, but it's not the only factor, and we (at Unionen) can't do anything about it," Hjert said. "What we need to do is increase productivity in Swedish companies."
 
For several years the rate of increase in Sweden has been higher than in most competing nations. Between 2008 and 2012 Sweden's rate of increase for labour costs was 3.7 percent, compared to 2.8 in western Europe.
 
An hour of labour in Germany came in at 317 ($47.74) kronor, in France at 270 ($40.77), and in the USA at 235 ($35.49).
 
Solveig Rundquist

Related links:

The Local (news@thelocal.se)

Your comments about this article

Today's headlines
Armless man denied disabled parking spot
Photo: Magnus Manske/Wikipedia

Armless man denied disabled parking spot

A Swedish man has had his disabled parking permit revoked despite lacking both arms and thus unable to pay for a ticket. READ  

Armed robbers attack Stockholm money truck
Police investigating a previous raid in 2013. Photo: TT

Armed robbers attack Stockholm money truck

Police in the Swedish capital are investigating a raid on a van transporting cash in the city, with at least two robbers suspected to have made off with a bag of money. READ  

Swedes among least likely to die from cold
A woman stuck in snow in Malmö during the winter. Photo: TT

Swedes among least likely to die from cold

Cold weather kills 20 times more people as hot weather, according to a new global study, but despite Sweden's harsh climate its inhabitants are less likely to die in chilly temperatures than Brits, Spaniards or Italians. READ  

'It's good that Swedish defence is quick to react'
Swedish PM Stefan Löfven speaking to reporters on Friday. Photo: Wiktor Nummelin/TT

'It's good that Swedish defence is quick to react'

Sweden's Prime Minister Stefan Löfven has praised the Swedish Air Force after two Jas Gripen aircraft warned off a pair of Russian fighter jets that strayed close to Swedish airspace this week. READ  

Frozen berry sales up despite deadly sickness
Raspberries are a popular snack in Sweden. Photo: TT

Frozen berry sales up despite deadly sickness

UPDATED: Sales of frozen berries are rising at one of Sweden's biggest supermarket chains, despite the fruits causing a deadly bug outbreak at an elderly care home, which has led to other EU nations reviewing their safety guidelines. READ  

Interview
'Serious blow' to EU if UK leaves says minister
Sweden's foreign minister Margot Wallström. Photo: Janerik Henriksson/TT

'Serious blow' to EU if UK leaves says minister

Two months after one of Sweden's biggest diplomatic disputes in decades, foreign minister Margot Wallström is ready to look to the future. In an exclusive interview with The Local, she discusses Sweden's strong stance on the Mediterranean migrant crisis and why she wants the UK to remain in the EU. READ  

Refugees to Sweden left in six-month limbo
Sweden's migration officers face a huge workload. Photo: Maja Suslin/TT

Refugees to Sweden left in six-month limbo

UPDATED: Asylum seekers arriving in Sweden are now likely to face a wait of up to six-months before they can have their cases heard, as migration officers struggle to cope with the workload. READ  

Sweden's Eurovision star Måns through to final
Sweden's Måns Zelmerlöw is through to the Eurovision 2015 final. Photo: Jessica Gow/TT

Sweden's Eurovision star Måns through to final

Sweden's Eurovision hope, Måns Zelmerlöw, sailed through with his track 'Heroes' in a semi-final that was mostly lined with rock goth-inspired ballads. But will he nail his gnome fist bump in time for Saturday's final? READ  

The Local Recipes
How to make crispy Swedish asparagus
Crispy baked asparagus. Photo: John Duxbury

How to make crispy Swedish asparagus

Asparagus season is upon us. Swedes love this green vegetable, so what better way to celebrate than with some crispy asparagus baked with traditional Swedish cheese. Food writer John Duxbury shares his recipe with The Local. READ  

Russian bombers caught close to Swedish island
A Jas Gripen plane snapped in 2013. Photo: TT

Russian bombers caught close to Swedish island

Two Swedish Jas Gripen aircraft warned off a pair of Russian fighter jets that were flying close to the southern Swedish island of Öland on Thursday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
How two million Swedes are designing a 'house of clicks'
National
What's on in Sweden this week
Sponsored Article
Kristin Amparo: 'Swedes are afraid to be proud'
National
Five facts you need to know about Sweden's Eurovision entry
Bupa
Sponsored Article
Healthcare: Nine questions every expat should ask
Blog updates

22 May

Editor’s blog, May 22nd (The Local Sweden) »

"Greetings from Stockholm, The hot topic in Europe this week is whether or not the UK will..." READ »

 

8 May

 (Joel Sherwood) »

"Daycare called today. They ordered me to drop all activities and come pick up my child...." READ »

 
 
 
Sponsored Article
What it's like to be a student in Malmö
National
Why do one in three Swedes want to join Nato?
Sponsored Article
'No one tells expats about unemployment benefits'
Features
What to do in Stockholm this summer
Sponsored Article
Why expat women are choosing Swedish natural birth control
Gallery
People-watching: May 20th
National
How Sweden and Saudi Arabia got back on speaking term after row
Gallery
Property of the week: Västra hamnen, Malmö
Sponsored Article
'There is no such thing as Swedish values'
National
Why is support for the Sweden Democrats at a record high?
Sponsored Article
ConnectSweden: Examining Sweden's place in the world
Gallery
People-watching: May 15th - 17th
National
VIDEO: Swedish man's roar scares off charging bear
National
'Gang conflict' linked to latest Gothenburg attack
National
RECIPE: How to make Panna cotta with cloudberry jam
Sponsored Article
'Educated immigrants get stuck in limbo in Sweden'
Gallery
IN PICTURES: Your May sun snaps
National
Sweden backs migrant sharing plan
National
Swedish boozing on the rise
National
Why Sweden's deputy PM was forced to apologize for Auschwitz analogy
National
End of the road for Julian Assange's arrest appeal?
Features
Booked to go to one of Sweden's sizzling music festivals yet?
National
Is Avicii set to play at Sweden's royal wedding?
National
Meet the Swedish boy who used to be a girl
Sponsored Article
How to change the world: Malmö to Mogadishu
Gallery
IN PICTURES: Princess Estelle through the years
National
Why is obesity ballooning in Sweden?
National
VIDEO: The bizarre Swedish nurses song that's gone viral
National
Ecuador stray dog Arthur in Swedish charity race
National
UK expert: 'Sweden's current military state is alarming'
National
Elfdalian: a real language spoken in central Sweden in 2015
National
Is King's love for house tracks behind new military music?
Gallery
Property of the week: Hjortnäs, Leksand
National
Sex-crazed grouse terrorizes Swedes
National
IN PICTURES: Sweden's King Carl XVI turns 69
National
Dolphins spotted in Baltic
Gallery
People-watching: May 1st-3rd
Sponsored Article
'Never waste a good crisis'
National
Road trippers flock to 'The Bridge'
National
Why are Swedish supermarkets banning paracetamol pills?
Gallery
People watching: April 29th
National
"In many ways Swedes and Americans are kindred spirits"
Politics
Did you know four Swedish party leaders are women?
National
Swedish rescue team stuck on way to Nepal quake zone
National
Why Sweden's brown bear population is in danger
National
TIMELINE: Julian Assange sex allegations in Sweden
Gallery
Property of the week: Forshaga
National
Here's how a Swede became the world's boxing champion
Swedish Hasbeens
Sponsored Article
Is the world wrong to connect Sweden with sex?
Sponsored Article
'Impossible' to run Skanska without Bromma Airport
Sponsored Article
Want to study in Sweden? Read why Stockholm is the best choice
Sponsored Article
'Sweden must embrace openness and diversity'
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

3,380
jobs available
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
psdmedia.se