Labour market policy to focus on young people and work environment

In the Budget Bill for 2015, the Government is taking several initiatives to tackle youth unemployment, including a 90-day guarantee for young people, trainee jobs and education contracts. The Government is also proposing initiatives to meet the challenges of modern working life, a higher ceiling for unemployment benefits, improved public employment services, earlier disbursement of resources for the EU employment initiative and 'extra jobs'. The Government also intends to lower the allowance paid to workplaces accepting apprentices in phase 3 of the job and development guarantee programme.

The high level of youth unemployment is one of the challenges for labour market policy to which the Government attaches highest priority. It is crucial to a society that young people are able to establish themselves in the labour market so that they can contribute and grow into independent individuals and members of society. The Government will now begin to implement an ambitious programme of reforms aimed at combating youth unemployment.

"No young person should have to start their adult life in unemployment, this is one of most important issues for the Government – to fight youth unemployment. It feels really positive to now be able to take these steps for a sustainable labour market policy for more jobs," says Minister for Employment Ylva Johansson.

The introduction of a 90-day guarantee for unemployed young people means that the Government wants to set a limit to how long a young person can be unemployed before being offered a job, a measure leading to a job, or a position in education or training. This limit will gradually be cut back to 90 days.

Under the proposal, the 90-day guarantee will cover all unemployed young people who register with Arbetsförmedlingen (the Swedish public employment service) and will be introduced gradually, beginning in 2015. The Government has given Arbetsförmedlingen instructions to prepare a step-by-step introduction of a 90-day guarantee. Achieving success in the fight against youth unemployment will require the combined efforts of all actors in society. In particular, the knowledge, commitment and contributions of the municipalities will play a vital role in the success of the reform efforts that are now beginning.

Education contracts for young unemployed people

Education is key to future jobs and competitiveness, and also to people's freedom to shape their own lives. The primary cause of long-term unemployment among young people is inadequate education. The education contract will give young unemployed people who have not completed upper secondary education the opportunity to study in municipal adult education and folk high school. The education contract is an important part of the 90-day guarantee. The aim is to support young people in obtaining jobs and work experience positions, while emphasising their own responsibility to make themselves employable by completing upper secondary education.

One objective is to make it possible to combine studies with part-time work experience or employment, if necessary. As part of introducing the education contract, unemployed young people aged 20–24 should continue to be eligible for the higher level of grant in the student aid system, provided they meet certain conditions. This possibility should be adapted in future according to the design of the 90-day guarantee. The Government also intends to extend the availability of folk high school courses aimed at encouraging more advanced studies.

Trainee jobs in the welfare sector

The Government's initiative for trainee jobs in certain parts of the welfare sector targets unemployed young people and is an important part of the 90-day guarantee. Trainee jobs will be fully subsidised positions consisting of work and training. As a rule, trainee jobs will be 75 per cent work and 25 per cent training and will be based on vocational introduction agreements. This subsidy will be available for a maximum of one year.

Trainee jobs are important both to fight youth unemployment and to increase staffing ratios in the welfare sector so as to raise the quality of services. The budget also contains a proposal to allocate funding for more education and training places in adult education. This should make it possible for young people who are offered trainee jobs to combine work with relevant vocational education and training.

Phase 3 will be replaced by 'extra jobs'

The Government wants to increase staffing ratios in the welfare sector and enable people to do something useful. There is a great opportunity to create social value and raise standards in the welfare sector. Instead of people who have been unemployed for an extended period being locked into meaningless measures that do not lead to jobs, they should be given real jobs with real wages. The Government will therefore have talks with the local government sector and relevant parties in the labour market about 'extra jobs' for the long-term unemployed.

Under the Government's proposal, extra jobs will be introduced in certain parts of the welfare sector and other publicly financed activities. The employer will receive financial support corresponding to the entire wage cost. Wages will be payable in accordance with collective agreements. As a rule, the position will be for 75 per cent of full-time hours. The rest of the time, the individual is expected to look for work or study. The extra jobs proposal will enter into force as soon as possible.

The Government wants to see a gradual phase-out of phase 3 of the job and development guarantee programme. The allowance paid to an employer providing employment in phase 3 will be lowered from SEK 4 950 per month to SEK 2 200 per month. Existing agreements will be allowed to run their course. During the time it takes to abolish phase 3, employment with a provider offering meaningful working duties may constitute a first step before a subsidised position, such as an extra job.

Higher ceiling in unemployment insurance system

The benefits provided by unemployment insurance have eroded over a prolonged period. Few of those covered now have benefits amounting to 80 per cent of their earned income during the first 100 days. The Government considers that raising the highest daily allowance in the income-related unemployment insurance system is vital to enable unemployment insurance to work as insurance against loss of income and as a safety net for the individual in the event of unemployment. The proposal will take effect on 1 May 2015.

Under the proposal, the highest daily allowance in the income-related unemployment insurance system will be raised so that anyone with a monthly income of up to SEK 25 000 will receive 80 per cent of their income for the first 100 days. This means the maximum daily allowance will be SEK 910 on days 1 to 100, after which the allowance will be gradually reduced to SEK 760 per day. The current daily allowance is SEK 680 per day for the whole period, which means that only those whose monthly income is no more than SEK 18 700 receive benefits worth 80 per cent of their income.

The current reduction of the regulated benefit level from 80 to 70 per cent after the 200th day of benefits and to 65 per cent after the 300th day of benefits will continue to apply. The Government also proposes an increase in the maximum benefit payable under basic unemployment insurance from the current level of SEK 320 per day to SEK 350 per day. In a second stage, the Government intends to raise the base amount to SEK 365 per day from 1 January 2016. This means the base amount will have been increased by a total of SEK 45.

Improved employment services

The Government is now launching a reform of Arbetsförmedlingen (the Swedish public employment service), to promote modernisation and development. Arbetsförmedlingen must arrange jobs both for people who are close to the labour market and people who are far from it – this is the way to create confidence among employers and jobseekers alike. Increases of SEK 905 million in 2015, SEK 940 million in 2016, SEK 965 million in 2017 and SEK 736 million in 2018 are proposed in Arbetsförmedlingen’s administrative appropriations.

The extra resources will be used partly to enable implementation of the reforms prioritised by the Government and partly to begin a process of change aimed at making the employment service a professional matching specialist. Arbetsförmedlingen will also need to work more extensively with municipalities. In addition, it will receive funding to maintain the quality of measures to help newly arrived immigrants become established in the labour market. The additional funding will be made available from 1 January 2015.

Investments in the work environment to meet the challenges of modern working life

During the past two electoral periods, work environment policies have been cut back. The number of work-related injuries and illnesses has increased. The growth in sickness absence, particularly among women, gives cause for concern. At the same time, the world of work faces major changes, as global competition continues to increase along with demands for more people to carry on working longer. Augmented resources are now needed in the area of work environment policy to tackle these developments.

The Swedish Work Environment Authority's appropriations will be increased by SEK 60 million from 2015 onwards. This initiative will improve supervision in the work environment area. Among other things, it will make it possible to employ more inspectors. In addition to this, the Government proposes a temporary boost in the Authority's appropriations for 2015 and 2016, of SEK 15 million and SEK 10 million respectively, to further develop special preventive measures for women's work environments. The central government grant for regional safety representatives will be increased by SEK 10 million from 2015 onwards, and by a further SEK 3 million in 2015 for a special training initiative.

A special initiative for working life research will be implemented in 2015–2018, with a focus on women’s work environment problems and work-related ill health.

Modern working life also demands innovative thinking in the work environment area. Work will therefore begin at the Government Offices to produce a new strategy for work environment policies, in close consultation with the social partners.

SEK 2 million will be allocated in 2015 and SEK 10 million per year in subsequent years to promote skills supply in occupational health services.

The increased appropriations for the Swedish Work Environment Authority and the increased central government support for regional safety representatives will take effect in 2015. The Government will return to the question of how the proposed funding for research in 2015–2018 will be distributed and how the support for skills supply in occupational health services will be designed.

Early disbursement of resources for EU employment initiative and the national Social Funds programme

With high youth unemployment and many people outside the labour market, it is tremendously important to use the funding available through the European Social Fund to the full. Social Fund actions are an important complement to ordinary labour market policy initiatives.

To speed up the implementation of the EU employment initiative for young people and other parts of the new Social Fund programme, European Social Fund resources have been brought forward. The increased funding will come to more than SEK 600 million in the period until 2017 and will entail a corresponding reduction later during the 2014–2020 programme period. This will not affect the total resources available under the Social Fund over time, which is controlled by the EU.

The Social Fund appropriation proposed by the previous Government in its last Budget Bill would have meant a slow start to the employment initiative for young people and the Social Fund programme.