Essay on The Swedish Model of Labor Market

532 Words3 Pages
The Swedish model of labor market is distinctive. There are several elements that build up a successful Swedish model. De-commodification of labor has been put into practice in order to balance power between capital and labor. There is a large degree of organization, The Swedish Trade Union Confederation (LO) and The Swedish Employers’ Confederation (SAF) which made possible for self-regulation. Working class is very strong which results in low level of labor market conflict. Centralized bargaining is also a key aspect that wage or work condition is an outcome of negotiation between two peak organizations. Moreover, Rhen- Meidner model was implemented in 1950s. The model intends to reach full employment in line with economic stability.…show more content…
The government was able to runs budget balance and unemployment rate was decreased dramatically. A significant change in this period was an implication of workfare policy. The policy affects supply side of labor in which it put more pressure for an individual worker to seek for a job. The process of acquiring social insurance benefit becomes more difficult. Workfare policy forces workers to work until they have no working capability at all. Unemployment insurance has been changed into a negative trend in a view of workers. In 2007 it became even stricter when the right-wings party was in power. Rules of qualification in order to obtain benefit are costly. It requires membership fee which has been increasing significantly. Thus, the fee system excludes workers who could not afford or think that it is not worth paying for. Minimum working period is included in the rule making more burdens to benefit claimer. Compensation level has been reduced from 90 percent of initial income to 80 percent. The rule turned to be even more complicated in 2007 that the compensation is 80 percent of initial income for the first 200 days and reduce to 70 percent for the rest day until 300 days. This significant change has a great impact on individual’s incentive. Most of people have left insurance and turn to private insurance like Trade Union. Moreover, people must concern more whether it is risky or not to change a certain job. This is because the government
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