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Youth unemployment lacks political solution

Chronicles/analysis | 2012-03-28 | 2 comments
The prospects for Sweden’s youth looks dim. The latest figures show that one in five of the country´s youth is unemployed. And the effects of an early unemployment is difficult to compensate. The persistent financial crisis and recession makes the situation difficult for Sweden´s youth and there is no political consensus on how the problem should be solved.


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High youth unemployment is however not something new. One need go back to 1990, before the large Swedish financial crisis, to find fewer than 10 per cent of the country's young unemployed.

The latest figures from Statistics Sweden show that one in five young adults, 22.5 per cent, are unemployed. The sharpest increase in recent years occurred between 2008 and 2009, just to fall back slightly last year. The younger the age, the higher is the unemployment level.

The Swedish youth unemployment level is slightly higher than the EU average of 21.6 per cent. But much above countries such as Austria, Germany, and the Netherlands who all reach under 9 per cent, according to Eurostat figures from the end of last year.

According to research from the Institute for Evaluation of Labour Market and Education Policy (IFAU), a research institute under the Swedish Ministry of Employment, initial effects of early unemployment does not mean one is put aside on the labour market for all time, but there is an increased risk over the next 5-6 years to become unemployed again.

The worst chances for recovery are among young people who have not graduated from upper secondary school.

The problems for young people are the worst if they right from the beginning end up in long-lasting unemployment. Even though most eventually get a job, they will most likely have to get accustomed to a lower salary.

Lack of political consensus

The centre-right government has, in a measure to reduce youth unemployment, reduced the employer contributions for young workers. The decrease in restaurant VAT has also been emphasized as a tool for more employees in a youth-intensive sector.

Even though youth unemployment often was above 20 percent also during the previous, centre-left government, it has not prevented the Social Democrats and its supporting parties from criticizing the current government's "ineffective tax reductions". Instead they want to fight the youth unemployment through employment training, a temporary trainee replacement scheme, and ensure that everyone can get a second chance to improve their grades by Municipality Adult education.

What should be remembered is that the regulation of the Swedish labour market is largely governed by agreements between trade unions and employers organizations. Excessive interference from politicians is not taken kindly.

The law of employment protection, introduced in 1974, may by some be seen as a hindrance to hiring younger people, but changing the law is political taboo. And since the financial crisis in the 90s is monetary policy heavily weighted in the fight against inflation, not for employment. This to the chagrin of some. Also this would be politically impossible to change.

Although everyone seems to agree that youth unemployment is a major problem, there is no political consensus in sight. Not even the governing centre-right coalition agrees on what should be done in the future. For example, the two liberal parties recently have stuck their necks out and advocated for lower starting salaries. Something they have not received support for, to say the least.

As said, everyone thinks youth unemployment is a major problem. And there are many indications that the problems will only be relieved fairly well by a stronger economy, something that became clear during the early 00's.

Perhaps it is time for the political parties to put their prestige own aside and try to for reach non-partisan solutions? Would they not be able to learn from each other? Maybe it's time for a joint parliamentary study that starts to ask the really big questions. For example, is our labour market model optimal in the times we live now? How could it be improved? 

Readers' comments

2012-04-12 01:11 VanKopius wrote:
UN , EU and banks would to get low the value of job as the new slavery , this is the thruth !
2012-04-03 19:48 Maxi34 wrote:
Quality of job market is going slightly low , it takes employing many extracomunitarian against our people ,why?


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