Reinfeldt slams proposal to lower youth wages

Prime Minister Fredrik Reinfelt has rejected the Liberal Party's proposal to lower young people's pay in the wake of rising youth unemployment in Sweden, and has urged politicians around the nation to follow suit.

Reinfeldt slams proposal to lower youth wages

The proposal was put forward by Liberal Party leader Jan Björklund in mid-March.

Björklund urged other party leaders to “be pioneers” and to introduce youth wages, which were proposed to be at 75 percent of a regular starting salary, and aimed towards young people up to the age of 23.

However, Reinfeldt has slammed the Liberal leader’s idea in an interview with newspaper Dagens Nyheter (DN) on Wednesday.

“We don’t reduce wages in Sweden, we raise them,” he said.

“The Moderate party does not endorse pay cuts. We advocate higher wages and other methods to lower thresholds for groups that have difficulty entering the workforce.”

Furthermore, the prime minister has urged other politicians from municipalities around Sweden to also reject the proposal.

However, statistics are not currently in Reinfeldt’s favour. Since 2006 when he came into office, unemployment among 20-24-year-olds has increased from 16.6 percent to 18.2 percent, according to Statistics Sweden (Statistiska centralbyrån, SCB).

These figures, according to Björklund, are simply too high.

“It’s better that a 19-year-old gets a job, even if it’s not as well paid, than that 19-year-olds should have to go unemployed and on social welfare,” Björklund said in March.

However, Reinfeldt argued that the problem with Swedish unemployment does not lie within the youth workforce, rather, that Sweden has “structural unemployment” in certain parts of the population, which he lists as the disabled, youth, and especially the foreign born.

He stated that the largest unemployment rate in Sweden is among the foreign born youth, however, that this did not mean there was “mass-unemployment” as Björklund had suggested.

“If you look at the traditional measure of ethnic born Swedes between 20-64, you will see a very low unemployment rate,” he told the paper.

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This is how much Swedish salaries increased in 2018

New figures released by Sweden’s National Mediation Institute (Medlingsinstitutet) on Wednesday showed that salaries increased at a faster rate last year than they did the year before.

This is how much Swedish salaries increased in 2018
File photo: Fredrik Sandberg/TT
Across Sweden, salaries increased by an average 2.6 percent during the first eleven months of 2018, representing a modest increase over the 2.3 percent growth seen in 2017. 
Public sector wages grew by 3.0 percent in November 2018, while the private sector increase was a more modest 2.4 percent. 
“The boom in the Swedish economy and the strong demand for labour have not had significant impacts on the rate of wage increase in the economy as a whole,” Medlingsinstitutet economist Valter Hultén said in a press release
“At the same time, demand for labour is very high in the public sector and this can be a contributing factor to the wage increases being somewhat higher there than in the business sector,” he continued. 
Although Sweden’s unemployment rate recently reached its lowest figure in ten years, there are signs that the labour market is beginning to cool.
Earlier this week, two redundancy support organizations said that they expected to see a significant increase in people needing their services in 2019 and in what could be considered a bad omen, Sweden’s job agency warned on Wednesday that it will let eliminate upwards of a third of its workers nationwide in a move that is expected to significantly impact job-seekers.