Tuesday, July 24, 2007

Sweden's Migrant Policy 2

From FX Street:

Sweden Eyes Bold Moves To Boost Worker Immigration

STOCKHOLM -(Dow Jones)- Sweden's bold proposals Tuesday to throw its door open to foreign workers is the government's latest attempt to relieve a tightening labor market and curb pressure on rising wage levels.

It's proposed that companies will have the right to recruit workers from anywhere in the world rather than being required to give preference to Swedes and other European Union members. The center-right government, elected in September, also says it will introduce a three-month job-seekers' visa allowing anyone in the world to come to Sweden to look for work. Time limits on work visas will also be thrown out, it says.

"If you look at the attitude of Swedish politicians, they are very open to worker immigration," said Robert Bergqvist, chief economist at Swedish bank SEB. "The proposal will increase the labor supply in Sweden, making it easier for people to come to Sweden to work."

Sweden's Migration Minister Tobias Billstrom highlighted the need to boost inward migration to keep pace with retirement levels.

"There will be more to take care of and fewer to support these people," said Billstrom at a press conference Tuesday. "Increasing worker migration can be one way to solve this problem."

Billstrom added these measures will allow Sweden "to be better prepared to recruitthe best to our country."

The proportion of Swedes over the age of 65 is forecast to rise to 21% by 2020 and to 24% in 2050 from 17% in 2006, according to projections from Eurostat. For the European Union, the proportion is set to rise to 30% by 2050, with Spain tops at 36%.

Sweden's government, with a mandate to tweak the welfare state, has already carried out a number of changes aimed at upping incentives to encourage work in Sweden, including cutting income taxes and trimming unemployment handouts.

The country's labor market continues to improve, with unemployment down to a 3.9% rate in May from 6.3% last June.

Demand for pay increases is also picking up as the labor market tightens and some sectors experience problems attracting workers.

The Finance Ministry forecasts wage growth increasing to 4% this year and 4.3% next year from 3.1% in 2006.

The Confederation of Swedish Enterprise, an umbrella organization of Swedish employers, has welcomed the government's new proposals.

Confederation director Urban Backstrom said Tuesday in a statement that there are already labor shortages in construction and added that Sweden's aging population will increase recruitment problems in the future.

"We therefore welcome that the government is now addressing this question," Backstrom said.

Sweden's trade unions, however, are worried.

"They are now giving more power to employers," said Dan Andersson, chief economist at trade union confederation Landsorganisation. "This will have an impact on wages, pushing them lower. It will also increase market competition for lower-skilled workers and make it hard for young people to join the work force for the first time."

Billstrom said trade union criticism of the proposals was expected but he disagreed that wages will fall because of the new proposals.

"All Swedish collective bargaining agreements will still be followed," he said. "Workers who migrate here will have the same working conditions as everybody else."

Sweden was one of only three European Union member countries - the others were the U.K. and Ireland - that didn't place immigration restrictions on citizens from the new E.U. member states that joined in 2004.

The Swedish government's proposals put the country at the top of the list of foreigner worker-friendly governments.

No quotas will be set on the number of people who can come to work in Sweden and the current policy of allowing workers who move to Sweden to bring families with them will also continue, Billstrom said.

The immigration proposals will be under review until mid-November. If implemented, they would come into force next spring, a government spokesman said.

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