The current Swedish government, a coalition including the Sweden Democrats, prioritizes reinstating the ”work line,” a principle emphasizing the importance of work over welfare benefits. This involves increasing requirements for job seekers and implementing a welfare reform, alongside tax cuts for low earners. However, despite these efforts, unemployment has risen during their tenure, contradicting their initial aims of fostering economic prosperity and optimism leading up to the next election. Government forecasts predict unemployment will be even higher by the next election than when they assumed power, reaching 8.1% in 2026 compared to 7.5% upon taking office, placing Sweden amongst the EU countries with the highest unemployment rates.
A major obstacle is the skills gap prevalent amongst the unemployed. Three-quarters of those seeking work possess ”weak competitiveness” due to factors like being born outside of Europe, having disabilities, lacking a high school diploma, or being over 55. These individuals struggle to gain a foothold in the modern job market, where most employers prioritize applicants with secondary education. This poses a significant challenge for a considerable portion of the unemployed, with a third lacking a high school diploma and a further 17,000 having no formal education at all. Eva Samakovlis, chief analyst at the Swedish Public Employment Service, highlights the long road to employment for these individuals, potentially taking up to 15 years for some foreign-born job seekers to establish themselves.
The government’s strategy of stricter requirements for the unemployed is questioned for its effectiveness in addressing the most vulnerable job seekers. Experts like Samakovlis and Anders Forsberg from the Institute for Evaluation of Labour Market and Education Policy (IFAU) suggest that a substantial number of individuals may never be able to secure employment. Forsberg points to the previous “Phase 3” program, designed to provide alternative engagement for those who had exhausted traditional job-seeking support. While its implementation was criticized, the underlying principle of providing alternatives for those unable to find conventional employment remains relevant.
Long-term unemployment is a growing concern. Around 80,000 people have been unemployed for over two years, and this figure is expected to rise. Although long-term unemployment declined after peaking during the pandemic, it has been on an upward trend since the summer of 2023. The Public Employment Service notes that certain groups face greater difficulty competing for jobs, a problem exacerbated by the economic downturn. Samakovlis underscores the need for intensified support and targeted interventions to help those with weak competitiveness approach the labor market.
Samakovlis further emphasizes that stricter requirements may be futile if the mismatch between employer demands and job seeker qualifications persists. She stresses the importance of employers broadening their recruitment practices and taking responsibility alongside the Public Employment Service. The disconnect between available jobs and suitable candidates is a recurring issue in the Swedish labor market, with successive governments struggling to improve the matching process.
Addressing this challenge requires a multifaceted approach. Forslund advocates for increased government investment in support for the long-term unemployed, highlighting the proven effectiveness of subsidized employment and labor market training programs. He criticizes past governments for failing to expand these training opportunities through the Public Employment Service. Furthermore, Forslund stresses the importance of adequate access to employment service officers, emphasizing that many long-term unemployed individuals lack sufficient support from caseworkers. Improved access to these resources is crucial for facilitating their reintegration into the workforce.
