Sweden announces major jobs package

The Swedish government announced on Friday it plans to spend 23 billion kronor ($2.8 billion) over the next three years on “employment and retraining” measures in an attempt to minimize the effects of the weak economy.

Sweden announces major jobs package

The package includes increased support for the unemployed as well as more funding for high school and college-level vocational training.

The government plans to spend 8.3 billion kronor in 2009 and 8.8 billion in 2010, before reducing the size of the support package to 5.8 billion in 2011.

The measures were announced during a joint news conference featuring the heads of the four centre-right governing parties.

Also included in the package is a call for more spending on infrastructure projects and an increase in the tax deduction available for construction services related to home repairs and maintenance (ROT-avdraget).

The deduction will go into effect immediately.

“So you can start ordering your services now,” said Enterprise Minister and Centre Party leader Maud Olofsson, who proposed that home owners could take advantage of the tax break to help make their homes more energy efficient.

“That has an effect on employment which we estimate affects 7,000 people,” she said.

According to the government, the comprehensive jobs package will provide employment or educational assistance to 58,700 people in 2009; 72,000 people in 2010; and 34,200 people in 2011.

“Sweden is clearly feeling the global crisis. Sweden is an export-dependent country and it’s hard to confront [the crisis] when so much depends on our export markets,” said Prime Minister Fredrik Reinfeldt.

The prime minister also stressed the importance of bolstering the financial system while at the same time keeping an eye on government spending.

“Today it’s also important to get a financial package in place that can address the need for better access to credit,” he said.

“It’s important to emphasize the importance of the financial policy framework. We can’t lose our grip on public finances […] the best news we can give the Swedish people is to provide a stimulus which won’t eventually lead to tax increases or a reduction in welfare.”

Nearly 3 billion kronor will be spent to help improve efforts by Sweden’s National Public Employment Agency (Arbetsförmedlingen) to match job seekers with potential employers.

Social Minister Göran Hägglund said the government had taken the opinions of representatives from regional employment offices into account in formulating the measure.

“The point is to help those who are unemployed to get a new job as quickly as possible so that people are on their way toward getting a job when the economy turns around,” he said.

Education Minister Jan Björklund then discussed the high number of places available within Sweden’s education system.

“Right now colleges have between 10,000 and 12,000 spaces available. Thus we conclude today that there is no need for more places. However, when it comes to adult education, we’re proposing an expansion,” he said.

He explained that resources will be devoted toward creating 5,300 new places for adult vocational education during 2009, which Björklund claimed would allow 20,000 to 25,000 people to receive additional training.

“A vocational college with 3,000 spaces will be inaugurated. In reality, maybe around 6,000 people could given spaces there,” he said.

Björklund added that financial aid would be made more generous for students over 25-years-old, allowing them to have up to 80 percent of the costs of their studies covered by grants, up from the average of 30 percent which grants cover today.

The proposed measures would only be in effect from 2009 through 2011, with the exception of the proposed doubling of the reduction in payroll taxes for employers who hire a long-term unemployed worker.

In addition, the increased tax deduction for home renovation and maintenance services will also be made part of the permanent tax code governing household services.

The government plans to present the proposal for a vote in the Riksdag at the end of January.

For members


EXPLAINED: Can you negotiate a pay rise in Sweden to offset inflation?

With Sweden's central bank expecting inflation of nearly 8% this year, everyone working in the country is in line for a real-terms pay cut. We asked Gunilla Krieg, central ombudsman at the Unionen union, what scope there is to negotiate a salary hike to compensate.

EXPLAINED: Can you negotiate a pay rise in Sweden to offset inflation?

With Sweden’s central bank expecting inflation of nearly 8% this year, everyone working in the country is in line for a real-terms pay cut. We asked Gunilla Krieg, central ombudsman at the Unionen union, what scope there is to negotiate a salary hike to compensate.

How soon can I get a pay rise to compensate for high inflation? 

Probably not for a while. 

About 90 percent of workers in Sweden are covered by the collective bargaining agreements made between employers and the country’s trade unions. The last round of salary deals was negotiated at the union-employer level back in 2020, and most of them will remain valid until March or April next year.

This means that most employees in Sweden will not see their salaries adjusted to take inflation into account for at least nine months. 

“Under this special model that we have, we already have a level for the wage increases for this year, so you can’t get compensation for the inflation right now,” Krieg explained. 

You might be able negotiate a pay rise in addition to what the unions have agreed in your personal salary review, she added. 

“Of course, you have that freedom. Whether you work in a small company, or a big company, a company that has a collective agreement, or one that doesn’t, you always have the freedom to ask for a salary rise,” Krieg said. 

The only issue is that most unionised companies only offer personal salary reviews once a year, and for the majority of employees, the window of opportunity passed in the spring. 

“You have to find out when you have a salary review as part of the collective agreement you have at your own workplace,” Krieg recommended. “For most collective agreements, that is in the spring, although some collective agreements have it in the autumn.” 

What if I’m not part of a union? 

If you are among the 10% of workers not covered by a collective bargaining agreement, you can ask for a pay rise whenever you like, but unlike union members, you have no right to a pay rise. The decision is wholly up to your employer. 

Gunilla Krief is the central ombudsman for the Unionen union. Photo: Patrik Nygren/Unionen

So will the unions eventually negotiate above-inflation pay increases? 

Probably not. 

Unions in Sweden have historically been quite responsible, and understood the risk of creating a wage-price spiral by demanding wage increases that match or exceed inflation.

“Twenty-five years ago, we had a really high wage increases in Sweden, and we had very, very big inflation, so people got more money in their wallets, but they couldn’t buy anything, because inflation went up much higher than wages,” Krieg explained, putting the union perspective.

“We always take responsibility for the entire labour market, and that’s good in the long term,” she added. “There’s been much more money in the wallet for employees in Sweden over the past 25 years. That’s why we think we should we should not panic because of inflation. It may be that for one year it will mean less money in the wallet, but in the long run we benefit.” 

Can I argue for an inflation-busting pay rise in my salary review? 

You can certainly argue for a pay rise of 8 percent, or even more, but you don’t cite inflation as a reason for it. 

“Everything is individual, so you can, of course, negotiate up your salary, and there is no limit to how much you can ask for,” Krieg explained.

“If you have a job or an education for which there’s a shortage on the Swedish market, then you can get a much higher wage increase. Up in the north of Sweden, where we have [the battery manufacturer] Northvolt, and we have mines and the steel industry, they are looking for a lot of competence right now, and there you can have a much higher rise in wages.” 

But, particularly if you’re covered by collective bargaining, you can’t really cite inflation as justification, as that is one of the factors that unions and employers are supposed to factor in during their negotiations. 

What’s the best way of getting a big pay rise? 

The best way to get a pay hike of as much as 5,000 kronor or 10,000 kronor a month, Krieg suggests, is to apply for other jobs, even if you don’t end up taking them. 

“You can get offers from other companies, and then you can tell your employer that ‘I really liked it here, I enjoy this work, and I want to stay here, but now they are offering me 10,000 kronor more at another company, and if you can raise my salary like that,  of course I will stay here’,” she said.

In a normal salary interview, she adds, it’s important to be able to demonstrate your results. Look again at your job description, and what your goals are for the year, and identify concrete achievements that meet or exceed these goals. If you have any additional duties, you can cite them to argue for a higher salary. If you’ve done any courses, or learned any skills, you can cite these. 

At any time in the year, if your superiors praise any work you have done, keep those emails, or write it down, so that in your salary review, you can say, “you said that this report I did was ‘the best you’ve ever seen’,” or such like. 

Finally, you should find out in advance if there are any salary criteria being applied, so that you can argue that you exceed them, and so demand a higher raise than that agreed for the company as a whole with the union.