Borg rejects increased jobless compensation
Swedish Finance Minister Anders Borg says there are no plans to raise the criticised ceiling in unemployment benefits. Speaking to Swedish Radio News, Borg said making a change would have negative consequences.
Shortly after it took power six years ago, the center-right government changed the unemployment insurance system, generally raising workers’ monthly fees and lowering the maximum compensation, a move that led thousands to leave the system. Criticism of the reform became more outspoken after the economic downturn increased the number of jobless.
Unemployed workers are supposed to get 80 percent of their previous salaries. But the ceiling is US$2300 and has not been raised in six years. Economics Professor Lars Calmfors tells Swedish Radio News the current level is too low in relationship with average incomes and no longer provides a reasonable safety net.
But Borg says that increasing the compensation ceiling would cost 30,000 jobs. He says he is open to the idea, but only after the current crisis when unemployment has dropped to five or six percent.
