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Employing the last unemployed

| Text: Björn Lindahl

Out of a total of 25 million people in the five Nordic countries, there are now only 422,000 unemployed. April saw the Norwegian unemployment rate plummet to 1.6 per cent. Denmark is close with 1.9 per cent. The numbers for Iceland and Sweden are somewhat higher, with 2.3 and 3.2 per cent. Finland has 6.8 per cent.

The total Nordic unemployment rate is the lowest for more than 30 years. This has led to increased ambitions among the Nordic ministers of labour. One of them is Danish Claus Hjort Frederiksen:

“When unemployment rates began falling four years ago the national figure was 170,000. Today we have barely 53,000 unemployed. In other words; less than a third”, Mr Hjort Frederiksen told a Nordjylland employment conference recently.

But there's a flipside to every coin. All the Nordic countries have large groups of people who might not be defined as unemployed, but who still don't work. They are on sick leave, have taken early retirement, have functional disabilities or receive social benefits. That's why “being an outsider” has become a key phrase in the Nordic political debate.

“The labour deficit has made businesses throw their nets a little wider”, says the Danish Minister for Labour.

“A new study from The Danish National Centre for Social Research, SFI, shows more than one in two businesses consider hiring people with a lowered capacity for work. If we cannot do that during the biggest boom ever, we never will manage”, he said.

Never before has there been such creativity when it comes to finding ways to lower the threshold for people who want to enter the labour market. A Swedish employer can get dispensation from paying employment tax for the same period of time that a new worker has been unemployed.

In Denmark the project “A fresh chance for all” is coming to an end. It's a government initiative granting extra cash to municipalities to get people who have been on passive benefit systems for more than a year back into work.

In Finland some 30,000 people on long-term sick leave have said they wish to return to the labour market, according to a new survey.

A turning trend

At the same time, the trend is turning:

“The weakening of the labour market is becoming more and more evident throughout the country. In a few months time we can expect unemployment to start increasing”, writes the Swedish Public Employment Service.

There is therefore a risk that attitudes will change. The Danish National Centre for Social Research has measured the social commitment of Danish businesses and their employees since 1998.

2,500 heads of personnel and 6,500 employees are interviewed in alternating years. The results show both companies and employees becoming more and more positive to the idea of a “labour market open for all”.

In 2001, 31 per cent of bosses said they were to “a very high degree” or to “a high degree” personally committed to make sure businesses knew their social responsibility. In 2006 there was a dramatic increase in this figure, when 66 per cent said they were personally committed to this.
There has also been a positive trend among employees. The largest difference in opinion was on whether they felt colleagues on sick leave were respected.
In 1999 61 per cent said they were, in 2006 that number was 79 per cent.

Keep staff or hire fresh blood?

Businesses are generally more positive to try to keep employees who have developed problems, rather than hiring new staff and giving them less to do. This according to researchers Maja Rosenstock, Joachim Boll and Helle Holt, who have reviewed the past ten years of studies from SFI.

It also depends on your perspective, they say. Those who themselves have become ill, do not feel they are being treated with more consideration.
“Despite the lack of labour, less than half of the businesses, 46 per cent, want to employ new people.


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