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Labour market

Government reform fails to employ young people

Publicerat fredag 20 april 2012 kl 09.02
Photo: Kim Holm/Sveriges Radio

The center-right coalition government's core initiative to get young people into the job market is having little impact. Less than 4 percent of those eligible for an employment subsidy, introduced in 2008, are receiving it, Swedish Radio News reported on Friday.

The reform, considered an incentive for employers to hire young workers in long-term unemployment, significantly lowers costs for the employer.

According to the government, a young worker earning a monthly salary of US$2,500 would cost the employer only US$420 per month to hire, with the rest covered by the state.

But research show that the subsidy is having little effect. Out of 13,000 young people eligible for the subsidy, only 500 are currently receiving it.

"We think this model is working well. It is now important for me to reach out to all employers in Sweden, because I know that many more would like to contribute to lowering youth unemployment," Sweden's Labour Market Minister Hillevi Engström told Swedish Radio News.

Engström said employers are uninformed about the benefits of employing young people who have spent time outside of the labour market.

The Public Employment Service will be given an additional US$148 this year to cover job coaching for young people and spread information about the subsidy.

Patrik Karlsson, a labour market specialist at the Confederation of Swedish Enterprise, said that hiring young people is not always beneficial to employers, regardless of the subsidies available.

"Employers are primarily in need of people who can really contribute to their business, and if young people don't have the skills needed that will not happen. Companies must cater to their own needs first," he said.

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