400.000 New Jobs

According to a report published earlier, in June/July, by TCO (Tjänstemännens CentralOrganisation – central organisation for civil servants/white collar workers [the Swedish Confederation of Professional Employees]), Sweden needs to create 400.000 new jobs (net) during the next ten years.

As usual, this has to do with demography and the rather shitty population profile Sweden, like so many other countries, has. Too many people retire, live too long and require too much from society without there being enough people working to be able to support this by taxes. Unfortunately, I haven’t been able to come up with the proper demographic diagram of the Swedish population.

When the conservative Alliance coalition (conservatives (Nya Moderaterna), Center party (Centerpartiet), Liberals (Folkpartiet) and Christian Democrats (Kristdemokraterna)) government came to in 2006, it set about to remedy this situation in the usual conservative way.

The immediate solution was to assume that unions are dangerous as hell and a bloody communist scourge of the Earth, the unemployed are just a bunch of lazy retards and the sick are just feigning illness in order to be supported for life with no questions asked.

Remedies were:

  • increase the fees to the unemployment funds (the actual unemployment benefits is government money but membership fees are required for administration) so that nearly 500.000 people left the union-associated funds
  • make it harder to qualify for unemployment benefits and shorten the time you can be on it
  • For the love of God, don’t raise the unemployment benefits (since like way back or when I was on the dole back in 2002-2004 it was the same as it is now – 680 SEK per day maximum)
  • disqualify people from health insurance benefits from the social security system after a certain number of days

This had the “positive” (yeah, right!) effect that the unions got weaker (applauded by the conservatives who hate unions just a much as they hate any form of socialism and what isn’t conservative is socialism) and that the costs for unemployment and health benefits decreased. Actually the costs didn’t decrease. They were just shipped off to different but non-government accounts.

I’ll give you an example; today, barely 30 percent of the unemployed are entitled to unemployment benefits whereas before the Alliance took over, 70 percent were entitled to unemployment benefits and the sick weren’t living in constant fear of being kicked out into the street.

The public employment services got the responsibility for those kicked out of the health insurance system. This took place in 2010. At the same time the government decided that the public employment services should also assume responsibility for the immigrants, who’d, after passing through the asylum process and got a temporary or permanent residence permit, in the so called establishment programme. This used to be a responsibility for the municipalities.

A side-note! Only about four percent of those who have completed the establishment programme after those two years have gotten unsubsidised jobs. Another, I think, ten or twelve percent have subsidised jobs. That means that part of their salary is paid by society. I must also add that I don’t know the percentage of immigrants entering into the establishment programme. It is, as far as I know, voluntary so the immigrant may opt out. Also, there is a settlement part in the programme which means that the employment services will help the immigrant trying to match skills with what demands the labour market has in various parts of Sweden and also available housing and acceptance by the municipality. This part is also voluntary and the immigrant may opt out.

Side effects were that the costs for municipality administrated social assistance (social welfare) increased and that more than half of the people in the employment services’ care are those who are the farthest from the labour market.

The Alliance did, however, nothing really in order to create more jobs! Some may now call me unfair because the government did two things: they cut the employer payroll tax by half (from 31.42 percent to 15.49 for those under 27 years of age); they cut sales tax/VAT for restaurants by half, from 25 percent to 12.

Oh! I forgot! 😉 They added four so called income tax credits!

Now, why did the government give us the income tax credits?

The answer is really fairly simple. Sweden, like many other industrialized nations, have become expensive. It is expensive to run businesses here. Labour is expensive, taxes are fairly high and people expect profits and that drives the costs up. The only way to lower costs is by devaluing the Swedish crown which we can’t do because we’re a member of the EU and we have tied the Swedish crown (SEK) to the monetary cooperation of the EU even though we haven’t adopted the EURO currency.

So, what has the government achieved so far? They have:

  • weakened unions by raising fees forcing people to leave
  • not raised/cut back on unemployment benefits
  • kicked people out of the health insurance system
  • increased the number of unemployed
  • cut taxes for those who have a job, thereby cutting back on future demands on raised salaries during central negotiations between unions and employers thus lowering the general costs

Now why did they do this?

Because they wanted to create a (stronger) incentive to work! Simple, right? Fine! As long as there are jobs to be had!

Being conservative, the Alliance government felt, as all conservative governments feel, that people (except for their own ilk) are just a bunch of lazy, worthless bastards who can’t be troubled with work unless, you more or less whip them 24/7, and who are constantly demanding more, more, more!

There’s just one teeny weeny problem left… (ahem!) There are no jobs to be had! Oops! Oh, bummer!

Well, there are jobs to be had. Problem is that many, but far less than employers think, can’t take the jobs available. They don’t have the qualifications, whatever goes into that word these days. And then you can add the usual fastidiousness of the average employer. He will often want to hire someone who:

  • has at least one academic degree after no less than four years of university studies
  • has already worked for the company in that particular position for at least ten years
  • has at least twenty years of working experience
  • is not older than 35 and not much younger either
  • is male – females can do if they make it clear (not verbally – because that’s forbidden at least to ask about) that they’re not intending to have kids in the imminent (like rest of their working life) future
  • are married (straight, not gay) or at least not being openly gay (no screaming pink elephants, puhlease!)
  • has no kids or at least has a wife who is a 100 percent housewife and can deal with the kids when they’re sick (we do have a föräldraförsäkring – parent’s insurance against loss of salary during period of staying at home with a sick child)
  • is not handicapped
  • is not (overly) overweight, deaf, blind or generally lacking in any other way

And, God forbid, mustn’t have a first name like Mohammed. Or Ali. Or Mustafa. Or Reza. John, Kevin, Peter, Mark will do just fine!

Let’s backtrack a second. That payroll tax cut for those under 27 years of age didn’t do any miracles. There is very little evidence, according to studies, that that cut actually gave youths more jobs. Youth unemployment is an issue here just like in so many other countries.

And another backtrack. No, the cut sales tax/VAT on restaurants didn’t amount to anything. The general idea was, again, to provide jobs for youths since this is a business where many young people often get their first contact with the labour market. Actually, the cut tax increased the margins for the employers, not necessarily a bad thing. It did emphatically not lower the prices, quite the opposite as a matter of fact. And it certainly did absolutely nothing for youths needing a job. The Alliance government will love to argue that but then they’d love to argue a lot of things equally wrong. I guess that’s something in the nature of being a conservative.

Just one more word on that demand for people with a university degree which is often just plain idiocy. Take home care services provided for a moderate charge by law by municipalities. This is mostly care and service for old age pensioners who aren’t quite up to par. It is also available for the younger with disabilities  via the LSS legislation. Home care is about helping people get up in the morning, showering, get to bed in the evening, cleaning, shopping, preparing food, giving them their meds etc.

There is absolutely nothing in what home care does that requires a university degree! Nothing, trust me! I did a three and a half months stint in home care when I was “between jobs” in 2003. Still, people with high school diploma are bypassed in favour of those with a university degree when it comes to hiring. Just why is that?

So… How do we go about creating 40.000 new jobs, net, every year?

*sigh*

Well…

Umm…

*great sigh*

Thing is… While traditional industry, the one that once soaked up tens of thousands of people,  isn’t even on the horizon and everybody can’t be expected to become an engineer and invent fanciful products and services we can export (thereby earning foreign money so that the Swedish economy can grow, because, trust me, there is no other way), what is left are various other forms of domestic services. Rutor and smörgåsnissar. This is a play with words, actually. Swedish words so I don’t really expect you lot to understand this. hehehe

There are two ways here to get extra tax deductions on domestic services: RUT and ROT. RUT is a tax deduction you can get for domestic household service like cleaning. Rut is also a female name and “smörgåsnisse” (masculin and Nisse is “short” for Nils, a male name) is the old-fashioned Swedish name for bus-boy who is working in restaurants – you know the business that despite the halved sales tax/VAT and the equally halved payroll tax, for those under the age of 27, didn’t manage to employ (and who really thought it would?) the youths they were supposed to.

ROT is a tax deduction for those who need moderate forms of own home help like fixing a leaky roof etc.

Let’s face it! All the unemployed, 8.5 percent, can’t all become Rutor and smörgåsnissar!

And then we have the immigrants. While ethnic Swedes have an 85 percent participation in the labour market, immigrants are active only to about 65 percent for various reasons. This means that there are one heck of a lot of immigrants to get to work. Also, Swedish women work a lot, too, while immigrant women don’t work as much. And we’re constantly getting more of immigrants.

One reason to why there’s a 20 percent gap is that, yes, Sweden is a difficult country to make it in. There’s no doubt about it. The language is tough to learn and because of our long history of being homogeneous, those too different has a hard time here. Our bad!

At the same time, immigrants don’t really have what it takes to make it here. Not when like 40+ percent (Somalis) have a pre-high school education (ranging from total illiteracy (wast majority probably) to a maximum of ten years of primary school), 20 percent or so have a high school diploma or what constitutes a high school diploma and about 10 percent have a university degree.

And don’t listen too closely when our minister of integration speaks (Erik Ullenhag (Lib.)). He usually just regurgitates his mantra that 600.000 immigrants goes to work every day. And that means absolutely nothing because he hasn’t defined what he means by immigrants, when they came here, what they did before and what they do here etc.

Are we racists? Is that why immigrants are hired to a lesser degree? The OECD states, in a recent survey, that Sweden is one of the least racist countries even though pundits, politicians and national media “journalists” here do their very utmost to prove to us that we’re the worst racist monsters ever to be born on the face of this planet.

No, we’re not racists! We’re sceptical towards what is (too) different from us and we have high demands. Too high, perhaps. But then again, nobody fails even primary schools like immigrants, children of immigrants.

What kind of a job will you be able to get when you pass in like two, three or four subjects and totally fail in all the other? When schools are, in some places, 100 percent segregated because ethnic Swedish parents take their kids out of that school and puts them into another (a charter school, perhaps) with a lesser degree, or totally free, of immigrant children when the percentage reaches like 15-20 percent immigrant children. The reason? There’s too much noise and unrest. Also, ethnic Swedish kids gets bullied by immigrants. How about having your daughter being called whore all the time? Your son called “svenne”, a derogative word for ethnic Swede. But that’s really food for another of my rantings.

And when you have failed in virtually every subject that counts in primary school, and live in a smaller city or town… What jobs will there be for you?

The Alliance government has come up with one (in)substantial idea as how to tackle that infuriating gap in immigrant participation on the labour market. Special tax-free zones! Yes! A marvel of ingenuity from the conservatives and the liberals. Employers close to/inside tax-free zones hiring immigrants from the tax-free zones (suburbs – that’s where immigrants usually cluster) will get tax deductions. Great idea? No?

No! And here’s why! Lowering taxes when hiring immigrants (for probably a limited period like five years before they will have to start paying taxes in full) will give some businesses a tax-subsidised edge over their competition. They will be able to undercut competition in tenders and will be able to offer a lower prices for products and services rendered. Is this a good idea? Perhaps, but it will force competition to do exactly the same or they will risk being forced out of business. This isn’t fair.

Another idea broached is that immigrants living in certain areas will, generally, pay less tax thusly making it cheaper to hire them. Then again… There are three types of income taxes here in Sweden; state, county and municipality. The state tax is nil unless you make a certain amount each month. That leaves county and municipality tax which are they highest. They’re also fixed in that they do not vary with your income like the progressive state tax does.

Now, this might be a way to get more of our immigrants onto the labour market; lowering county and municipality taxes by making them progressive just like the state tax.

This is, perhaps, the way we will be able to create those 40.000 new jobs (net) per annum that we need for the next ten years.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s