16. June 2016

FutureLabbers Ana Luisa Correia, Marian Cramers, Efehan Danisman and Nathalie Straker met Kristina Persson, Swedish Minister for Nordic Cooperation and Strategic Development at the 2015 Forum of the Organisation for Economic Co-operation and Development (OECD). Mrs. Persson engaged with FutureLabbers in a vivid and fruitful debate about the inclusion of young people on the Swedish labour market.

A short report on the session, by Ana Correia:

Sweden is definitely one of countries in Europe that managed more successfully to minimise the negative effects of the economic and financial crisis erupted in 2008. Thanks to well-targeted policies, the country was able to keep in balance its welfare system, social protection mechanisms and employment rates, even under the strain of the economic crisis. Contrarily to other cases in Europe, Sweden did not provide any bailout; instead, banks wrote down losses and issued warrants to the government. As a result, the responsibility was put on the banks and the government was turned into an owner. Recovery of trust and confidence in the markets was fast and hence financial losses were minimized.

Along with this successful management of the banks, Sweden had to perform some adjustments to its labour market strategy. Unlike in many other countries, in Sweden, collective agreements dominate and have a high influence on labour market policies, with little interference from the government.

During the crisis, Sweden’s unemployment rate increased by almost 3 percentage points – from 6% in 2007 to a peak of 8.9% in 2010 according to OECD data. Part of this increase has been reabsorbed by now but despite this positive development, youth unemployment rates still remain well above the national average, with about a 24% of young Swedes currently unemployed. Employed young people in Sweden face challenges as well, having to cope with temporary contracts and low salaries.

Furthermore, there is a significant wage gap between young entrants´ (aged 18-24) salaries and people over 24.

Taking into account that young people are therefore more prone to fluctuations in the labour market, the Swedish Government presented a set of policies to mitigate the adverse effects of the crisis. Besides the youth employment guarantee scheme targeted at young people aged 16-25, the government launched the programme “New start jobs” for the age group 20-25 , aimed at creating jobs for young people who are at risk of social exclusion and (long-term) unemployment. The programme targets indeed people who (i)have been unemployed, (ii)received any activity compensation, (iii) sickness benefits or (iv) took part in employment promotion programs for 6 months, . In parallel, the government increased its efforts to promote the quality of education since the beginning of school age, by for instance investing in teachers and improving the quality of the teaching (“leaders in schools”). Education has indeed always been regarded by Swedish policy makers as a top priority to achieve growth and development. Another route that was provided as a way towards employment was entrepreneurship.

In addition to relatively well-designed labour market policies, Sweden also benefits from reliable public institutions, which have a significant impact on people’s acceptance of reforms. These institutions are vital to guarantee the trust of people in the government. The country ranks highly in indicators such as transparency, low corruption levels, fair and fast justice system, and accountability. Indeed, even in a period of uncertainty and external shocks, the government managed to follow the reforms necessary to stabilize imbalances that could disturb the country and this was made with people´s general support.

An impression on the session, by Efehan Danisman

“Meeting Swedish Minister Kristina Persson and discussing with her youth’s situation in the labour market was inspiring in many ways. The most important thing I have learnt from this meeting was the culture of compromise and collaboration in Swedish political culture thanks to the role of public institutions. This culture enables Sweden to make long term plans and to adjust swiftly to labour market changes. This admirable culture may not be easy to copy in larger European countries, such as France, Turkey or the United Kingdom, where the society entails cohorts which have a different vision of their country’s future.”