Swedbank: New work permit threshold 'a challenge' for Swedish model
Swedish banking giant Swedbank raised concern over the 'challenge' a new work permit salary threshold for non-EU citizens poses to the Swedish model.
In its most recent Economic Outlook report, Swedbank writes that the new work permit threshold challenges the Swedish model of determining salaries and salary raises, which are traditionally negotiated by unions and employer organisations without political influence.
Sweden, for example, does not have an official legal minimum wage, rather unions and employer organisations in each industry agree on a minimum salary between themselves, which is then regulated by a collective bargaining agreement.
The new work permit threshold, which came into force on November 1st, more than doubled the required salary for a Swedish work permit from 13,000 kronor a month to 27,360 kronor a month.
Crucially, the threshold applies to people who are already in Sweden on a work permit – they will need to fulfil the new requirements when they apply to renew their permit or when they apply for permanent residency.
"Above all, this could have a negative effect on the overall size of the workforce," Swedbank adds. "Which is a problem, as there is already a structural lack of core skills in Sweden."
Demographic factors also contribute towards the problem, the bank writes, resulting in a smaller workforce and an increased need for healthcare workers.
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In its most recent Economic Outlook report, Swedbank writes that the new work permit threshold challenges the Swedish model of determining salaries and salary raises, which are traditionally negotiated by unions and employer organisations without political influence.
Sweden, for example, does not have an official legal minimum wage, rather unions and employer organisations in each industry agree on a minimum salary between themselves, which is then regulated by a collective bargaining agreement.
The new work permit threshold, which came into force on November 1st, more than doubled the required salary for a Swedish work permit from 13,000 kronor a month to 27,360 kronor a month.
Crucially, the threshold applies to people who are already in Sweden on a work permit – they will need to fulfil the new requirements when they apply to renew their permit or when they apply for permanent residency.
"Above all, this could have a negative effect on the overall size of the workforce," Swedbank adds. "Which is a problem, as there is already a structural lack of core skills in Sweden."
Demographic factors also contribute towards the problem, the bank writes, resulting in a smaller workforce and an increased need for healthcare workers.
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