Response to interpellation 2023/24:318 on increasing unemployment and shortage of skilled labor
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
The debate concerns increasing unemployment and a shortage of qualified labor. L argues that a well-functioning labor market is crucial for prosperity 1 and that the government is strengthening Arbetsförmedlingen with 200 million kronor 1. L emphasizes that the work principle is strengthened through tax cuts and more educational places 1, as well as that investments in engineers and integration are the way to jobs 2. S argues that the government is ignoring a deep crisis with increasing bankruptcies and layoffs 3 and that the budget for labor market policy has been reduced 3. S believes that the government is cutting back on housing and job policy 4 and advocates for bank taxes 5.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Serkan Köse has asked me what measures I and the government intend to take to reduce the gap between the labor market's needs and the existing workforce's skills, especially given the growing unemployment and the acute shortage of qualified labor. Furthermore, he has asked me how I and the government intend to address the regional differences in unemployment and ensure that all parts of the country receive the support and resources needed to meet these challenges in an effective way.
Let me begin by saying that a well-functioning labor market is of crucial importance for a competitive economy and, in the long run, for securing prosperity in Sweden. The Swedish Public Employment Service's summary of the developments during 2023 does indeed show that long-term unemployment has decreased. However, unemployment and long-term unemployment remain at a high level, and the labor market policy needs to be designed so that more people get into work and so that it becomes more cost-effective.
Arbetsförmedlingen has a mandate to improve matching and support the supply of skills in the labor market, among other things through establishment jobs, new start jobs and matching services, as well as by increasing the number of participants in labor market training, work placements, wage subsidies and transitions to education within the education system, which in the long run aim for unsubsidized work.
Just as Serkan Köse highlights in his question, there are regional differences in the labor market. In northern Sweden, an extensive re-industrialization is underway linked to the green transition. It is by having everyone who can participate join in and contribute to the best of their ability that the Swedish welfare model can function in the long term and prosperity can increase.
In accordance with the budget bill for 2024, Arbetsförmedlingen's administrative grant is reinforced by 200 million kronor during the year to meet increased unemployment and strengthen the control work. The Government has tasked Arbetsförmedlingen with increasing the geographical and professional mobility among job seekers. This means that those who are unemployed shall be prepared to move within the country or change professions. Furthermore, Arbetsförmedlingen shall in its operations prioritize the work with persons who are or risk becoming long-term unemployed in order for these persons to transition to work or regular education.
The government continues the work to re-establish the work line. Despite the fact that Sweden has a high employment rate, there are many who do not support themselves through their own work. To counteract this, both the transfer and tax systems must be designed so that it is profitable to move from benefits to work.
In order for the labor supply to be matched against the labor market's needs, labor market and education policy must also be designed so that more people are given the conditions to educate and further educate themselves to better match the skills that employers demand. Together with, for example, an enhanced job tax credit for low- and middle-income earners as well as more places within both the university college and the vocational adult education, the government contributes to strengthening the work line. In accordance with the budget bill for 2024, 1,362 million kronor are allocated during 2024 for more education places in regional vocational adult education, and 385 million kronor are allocated for more education places in university college education.
In order to achieve better matching and establishment of newly graduated upper secondary school students, the government has also implemented necessary legislative changes to support that planning and dimensioning of upper secondary education within upper secondary schools and komvux is to a greater extent based on the needs of the labor market.
The Government closely follows the developments in the labor market and how Arbetsförmedlingen carries out its mission to meet the needs of both job seekers and employers.
Serkan Köse (S)
Mr. Speaker! I thank the Minister for the answer.
When I hear the Minister's answer, I wonder if we are living in the same reality. The answer given does not seem to address the questions I have asked, and there seems to be a lack of insight into the current crisis on the Swedish labor market.
Mr. Speaker! In January, the number of bankruptcies increased by 45 percent compared to the same month last year, according to the monthly statistics from the credit reporting companies. The largest increase, 170 percent, is noted within the health and care sector, followed by the hotel and restaurant industry at 113 percent. It is 16,000 companies that risk going bankrupt during 2024. The companies at greatest risk are within the construction sector and restaurant operations. Within restaurant operations, many companies are fighting for their survival. What is Johan Pehrson doing about it?
During the last quarter of 2023, almost 19,000 Swedes were notified of termination, an increase of over 40 percent compared to the same period the previous year. The absolute highest number of notices, 3,512, occurred within the construction industry. In total, the number of construction workers notified of termination increased by 154 percent during 2023.
Mr. Speaker! Overall, this shows that we have a deep crisis in the labor market - a crisis that requires immediate and major attention from the government, Johan Pehrson and the Sverigedemokraterna. But the government and Johan Pehrson do not seem to see the crisis but have buried their heads in the sand. They do not see the escalating unemployment, do not act, and do not come up with any proposals on how the situation should be handled and the jobs saved. During the pandemic, the Social Democratic government acted powerfully with package after package and not least with short-term layoffs and the like.
We are in an economic crisis, and it is a crisis on the Swedish labor market, Johan Pehrson. The costs are increasing, and unemployment is increasing. What does Johan Pehrson do in this crisis? Well, he says that he is increasing the appropriations to Arbetsförmedlingen and to labor market and education policy. But the reality does not quite align with what Johan Pehrson says. In the budget, Johan Pehrson has cut both the money for labor market policy and for adult education. During the boom in 2018, 13 billion kronor went to active labor market policy. Today, in the middle of a crisis, that figure stands at 7 billion. It is deeply worrying, Johan Pehrson.
The construction sector has called for help and drawn the Minister for Employment's attention. It expects both the Minister for Employment and the Minister for Housing to act. Instead, Johan Pehrson talks about the job tax credit. How can that solve the deep crisis in the Swedish labor market? How is a tax cut for those who earn the most supposed to benefit the unemployed? Construction workers looking at this expect the Minister to give them an answer and some hope. How are they to make ends meet, be able to pay their bills and let their children continue to play football? What is Johan Pehrson's answer?
Teresa Carvalho (S)
Mr. Speaker! Johan Pehrson and I have clashed a few times before regarding the government's budget allocations for labor market policy, not least last year. I have repeatedly pointed out the absurdity of the SD-government choosing to cut massively in just this policy area during a recession when unemployment is increasing and jobs are standing idle. Despite the cuts, the Minister for Employment has asserted with almost a fool's persistence that there will be more and better measures. Yes, we have even heard the Minister for Employment say that the Swedish Public Employment Service is being strengthened.
Mr. Speaker! On Friday, Arbetsförmedlingen issued a press release. I want to read from it: "Arbetsförmedlingen risks having to reduce the number of employees by a hundred people. It is a consequence of the reduced management budget."
A little further down it says: "Compared to last year, Arbetsförmedlingens förvaltningsanslag, that is, funds intended primarily for staff, has decreased by more than 250 million kronor. The Government plans to continue with these savings in 2025 and 2026. Therefore, for this year, the agency has introduced a general saving of five percent as well as continued restrained recruitment."
Does Johan Pehrson stand firm on the fact that the government is strengthening Arbetsförmedlingen?
Everyone can see that Arbetsförmedlingen is not managing its mission, that they do not have time to meet those who need help, support, requirements, and intensive efforts. Next year, the savings are therefore expected to continue. Most understand that this will lead to higher unemployment, that it will pin long-term unemployment at perhaps historically high levels, and that it will exacerbate the segregation that is already causing large tears in the social fabric.
Where is the government's plan to counter unemployment and save Swedish jobs? We do not see it in the budget, because there are only cuts there. We do not see it in the list of government bills, so where is the plan? Or is it that the government has capitulated to unemployment?
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Crocodile tears are shed over the fact that there are many bankruptcies from the company's best friend. The healthcare and care companies are mentioned. Does Serkan Köse know what it is due to that many companies are forced into bankruptcy in this region? Yes, it is because the Social Democrats, who are governed by the Left Party and the Green Party and also the Center Party - congratulations to the members from that party who sit here in the chamber - are steamrolling those who deliver important welfare services. They withdraw and shut down even though there are resources to be used.
It is an ideological war against diversity, against the existence of companies that can deliver services. This is what the Centerpartiet is taking a stand against, which is somewhat surprising. But it is Vänsterpartiet and Miljöpartiet that are pushing this forward. It is so impractical, and it is as far as one can go from citizens in this region who need care and nursing.
If we are to get to grips with this financial crisis, we must continue to support the people who are having a tough time. It is about us increasing the compensation for students, pensioners, and those on parental leave. It is important. It is about us continuing to lower the tax for those with low and medium-high incomes. It is important. We have made efforts so that companies can more easily manage the debts that have built up, not least at the tax authorities, during the pandemic.
In the end, however, the Swedish economy is being pressured by a recession. It is being pressured by inflation and high interest rates. This government hates inflation. This government is doing everything we can to return to a Sweden where we get more investments that can help with the entire green transition and can create a growing Swedish labor market where more people get jobs.
We have 5.9 million people on the Swedish labor market. You here in the gallery or you here in the chamber meet the people who build Sweden and fight for Sweden. Unfortunately, too many people are unemployed. The way away from unemployment is language, integration, and education. It is also a matter of us having a strong economy with functioning energy systems and with taxes that are relevant, that attract. But the only thing one hears from the Social Democrats, Mr. Speaker, is that one should raise the tax for companies, especially for certain companies; that is how one should get fewer bankruptcies. I wonder what will happen with the interest payments for Sweden's small businesses with your policy.
We are making large investments in the public systems that are so crucial for internal and external security. It is about the rule of law and about defense, and we are also investing in education. In order for high-skilled jobs with high productivity to be created in this country, we are also investing in engineers for the future. We are now making the largest investment ever in engineers, both to manage the green transition and the climate in Sweden and to ensure that there are companies in Sweden that produce and deliver in a tough global market. It is about attracting investments. That is how we get down unemployment.
Arbetsförmedlingen is making important efforts. They have been notified that they have over 7 billion in appropriations. These funds can be used more efficiently, and I know that Arbetsförmedlingen's new board intends to do that.
Serkan Köse (S)
Mr. Speaker! I think this debate deserves a bit more seriousness from the Minister for Employment's side. It is such an unserious answer and such a low level in this discussion: to talk about crocodile tears and blame the political leadership of the City of Stockholm when we have 16,000 bankruptcies and thousands of people becoming unemployed!
We get calls every day from people who are almost crying on the phone and do not know how they are going to pay their bills. Then the minister blames the political leadership of Stockholm. The newspaper Byggindustrin has the headline "Had over 100 employees: Here are the largest bankruptcies in January". They are in Västra Frölunda, Huskvarna, Malmö, Jönköping, Stockholm, Örebro and so on. Do not shift your responsibility onto someone else - you are the Minister for Employment, and you have a responsibility. You owe an answer to all construction workers and construction companies here at home - to all those Swedes who now risk being laid off and dismissed and losing their economic income when they are supposed to support their family. You cannot shift the responsibility onto someone else!
The Minister speaks about resources for Arbetsförmedlingen, but why then does Arbetsförmedlingen issue a press release where they say they risk cuts? They say that they are forced to lay off staff because of Johan Pehrson's budget. How can it be said that the appropriations are increasing when it states in the press release that Arbetsförmedlingen receives reduced appropriations of 250 million kronor and that this will lead to them needing to make savings and lay off staff? A consequence of staff layoffs will be less support for the unemployed and less support for companies that need to recruit.
Johan Pehrson did not even mention the regional differences. We have increased unemployment in southern Sweden and a need for labor in northern Sweden. Arbetsförmedlingen needs resources to be able to help people in southern Sweden get a job and to be able to help companies that are crying out for labor in northern Sweden.
A national unity is needed. A Minister for Employment who can realize the gravity and seriousness of the discussion we are having today is needed. We are not standing here just to bark at the Minister for Employment.
The newspaper Byggnadsarbetaren shows a graphic of the number of increased bankruptcies in Sweden compared to Norway and Denmark - I am presenting this. It has increased significantly. Is it the fault of Stockholm City's political leadership that we have a larger increase in bankruptcies in Sweden than in Norway and Denmark? Byggnadsarbetaren writes that 941 people were laid off in 2022, and for 2023 that figure stands at 4,608. TT writes: "'Catastrophe level' when it comes to bankruptcies".
They expect the Minister for Employment and the sitting government with the Sweden Democrats to take their responsibility and help the construction sector, help forestry workers in Sweden to be able to get a job and ensure that there are also sufficient resources in the active labor market policy so that people get the opportunity to transition. More resources for labor market training than for the "nystartsjobb" (new start jobs), which feed crime, which we have talked about previously.
What is your answer, Johan Pehrson, to all the construction workers who are at home now and watching this debate? Take your responsibility!
Teresa Carvalho (S)
Mr. Speaker! Sweden is in a recession with rising unemployment, and almost daily we are met with reports of new layoffs and new bankruptcies, not least within the construction industry. But when we ask questions and point this out to the Minister for Employment, he accuses us of crocodile tears. It is outrageous, Johan Pehrson!
Norrköping is my home municipality, and as recently as yesterday I read in Norrköpings Tidningar about a construction company that has gone bankrupt. The news reached the employees two days before payday, during the year's poorest week. It may take some time before they receive money from the state wage guarantee, and I truly suffer with them today because they still have a lump in their stomachs over how the bills will be paid. But Johan Pehrson calls it crocodile tears.
Despite the recession, rising unemployment, and a dramatic increase in layoffs and bankruptcies, the government is cutting back on the housing policy, which had been needed to keep construction going and to ensure that construction workers do not lose their jobs to begin with. They are also cutting back on the job policy, which was needed for those who need to go to Arbetsförmedlingen and receive support and help to transition.
In the current situation, the Committee on Employment does not have any proposals to take a position on to meet the unemployment and the strike crisis. The Government is not coming forward with any initiatives, but what they are coming forward with are cuts.
Johan Pehrson is seen quite a bit in the media and likes to talk about the euro and other things, but where is the country's Minister for Employment when he is needed? What is the government's and the Sweden Democrats' plan to save Swedish jobs? This is what the Swedish people want to know, not least all the construction workers who have now lost their jobs.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! Serkan Köse began his interpellation by listing the bankruptcies within care and healthcare. It concerns companies that the Social Democrats, the Left Party, the Green Party, and the Center Party want to shut down. One is essentially strangling this entire sector, not everything, but one is hitting it quite hard in the region, with terrible effects for business owners, people who work there, and people who have needs for care, not infrequently special care and care. There, one moves forward like a bulldozer. One should take responsibility for this. It would be appropriate.
It is correct that there are differences between social democratic, socialist, and liberal labor market policies. For the Liberals, education is absolutely crucial for people to enter employment and meet the needs that exist in companies. There is a difference there, and I think we can speak openly about that.
The Social Democrats see Arbetsförmedlingen as the decisive tool, while the Liberals see it as a central tool that has an important mission to contribute to what is to be a job machine and to what ensures that we in Sweden, internationally speaking, have a very high labor force participation, perhaps one of the highest in the world. This is something the Liberals are very proud of.
If we are to address the unemployment that exists, and not least for those who have been unemployed for a longer period, one must focus on the language, on integration, and on regular, basic education. If the level is too low, it must be raised, and this is the individual's own responsibility. One shall receive support and help, but one must do the work oneself.
I meet a lot of entrepreneurs and employees who are having an incredibly tough time. These are people who have worked on their life's work as entrepreneurs and who now might be going bankrupt and have to communicate this with great pain to the employees. I see this, but there is only one way to address it, and it is not to, as the Social Democrats want, significantly raise taxes for certain companies and believe that it will not be passed on to the customers, who are heavily burdened by debt.
You Social Democrats want to introduce bank taxes, but do you not understand that this will lead to small businesses finding it even harder to survive? They may be sitting with a knife to their throats, but you say: "We are raising taxes." It is actually a surprising logic.
We have a fantastic system with an employment service that is to help people into the labor market with subsidized employment. I understand the pain of all the people who are affected, because I also meet people who have a lump in their stomach. To them, I want to say that we have a fantastic transition support in Sweden which is provided by the transition organizations and which is driven, not least, by the parties. It is a fantastic activity. We have an education system that, through the possibility of transition study support, makes it possible to transition in the middle of life to acquire a new competence and get a new job.
Finally, Mr. Speaker, there is no other way to get the construction industry started than by bringing down inflation and interest rates, because there is a need for construction. The government is on the right track. We inherited a very high inflation, but now it is on its way down.
Serkan Köse (S)
Mr. Speaker! Again: One becomes worried when listening to the Minister, for he seems to have fixated on companies within the health and social care sector. I also mentioned the hotel and restaurant industry, and I mentioned the construction sector. I mentioned that 16,000 companies risk going bankrupt in 2024. Many of these are within the construction sector but also within the hotel and restaurant business. Not one word about this came from Johan Pehrson, but he fixates on health and care.
Johan Pehrson speaks about bank taxes. I think that many households are having a very tough time. Johan Pehrson says that he understands that many are worried when life's work that has been built up goes into bankruptcy, but still, Johan Pehrson as responsible minister is not ready to take any measures.
Again: What does the Minister intend to do to send a signal to all the people at home so that they feel that something is happening from the government's side? The banks are making excess profits of 90 billion. Do you think it is wrong, Johan Pehrson, if this money could go towards households being able to pay their bills? Do you think it is wrong that we take a solidary responsibility in our country when people are having a very hard time, when thousands of people are struggling to make ends meet?
Is this the answer to all the construction workers who are sitting at home and watching this now and to all those who own a restaurant but cannot pay their bills now when the month is almost over and many bills are to be paid? Is Johan Pehrson's answer then "Don't touch the banks' taxes! Let them make money!", while households struggle to make ends meet and pay for the children's extracurricular activities?
This debate, Johan Pehrson, requires a serious discussion and that the Council of State, the government, and the Sweden Democrats take their responsibility and give the Swedish people an answer. How are you going to manage this crisis? There are 16,000 bankruptcies and thousands of people who risk becoming unemployed, but the Council of State blames the political leadership in the City of Stockholm.
Arbetsmarknads- och integrationsministern Johan Pehrson (L)
Mr. Speaker! First, Serkan Köse is upset that companies are running at a loss, but if one runs at a loss for too long, it leads to bankruptcy. Right now, here in this chamber, there is surely someone who has taken a course in how entrepreneurship works and how important it is to build Sweden, create a stronger Sweden, and create freedom and empowerment for individuals.
Hear and behold! The market economy is not perfect. We have quite extensive regulations and a fairly extensive tax burden to compensate for the market's shortcomings. We have social security legislation, unemployment insurance funds, transition support, public employment services, educational initiatives, and municipalities that guarantee subsistence support. We have also raised the level for those who are most vulnerable in a difficult time.
It is a problem when companies make a loss. But then it is a problem when the companies make a profit. We already have a bank tax. What is it that the Social Democrats do not understand? This incredibly easy-going war. When interest rates go down, profits will decrease. The government has taken measures to put pressure on the banks, to ensure that it becomes easier for us consumers to change banks and that we get both higher and lower interest rates.
But the situation with the interest rates is based on the fact that inflation is too high. That is what I and we got our hands on when the Social Democrats' government tenure ended. It should be said that it was not your fault. Many other things played a role, for example the war in Ukraine, which we also have to handle. We must prioritize very strictly for a better and healthier future for Sweden.
People are worried about profits but do not understand that companies also incur losses. I see the restaurant owners suffering because people cannot afford to go out and eat.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.