Former Swedish Employment Minister talks about how he achieved serious unemployment insurance reform, which holds lessons for Canada
OTTAWA, March 4 – When Sven Otto Littorin was a minister in the Swedish government, he oversaw a major overhaul of social services. He sat down with the Macdonald-Laurier Institute recently to share his views about the Swedish approach to public policy. Today, MLI releases the second of a two-part Q&A with Littorin in our Straight Talk series.
In the interview, Littorin spoke of the strong Swedish work ethic and how that informs the Swedish approach to unemployment insurance. "I think it goes back to this fundamental, egalitarian, engineering work ethic sort of thing we have in Sweden", he says.
In Sweden, unemployment insurance recipients are required to report to a government office on their efforts to look for work and are eventually retrained if unemployed for 100 days or more. Littorin says the average time a person is unemployed in Sweden is in the range of 90 days.
He also points out that the Swedish system does not give benefits to seasonal workers outside of the work season. He regards supporting seasonal industries as an issue of industrial policy, not a matter for unemployment insurance, and tells an anecdote about a pair of factories in Sweden that operate side by side, one making lawn mowers and the other making heating equipment using the same labour force and creating permanent, full-time jobs from previously seasonal work. "These are practical issues" he says. "Let's solve them, let's not just throw money at them".
MLI has drawn three recommendations for employment insurance reform from Littorin's comments:
1) Treat employment insurance as a true insurance program, rather than a subsidy to business.
2) Make payments generous but require recipients to actively seek work and take part in training.
3) Cover seasonal workers for lost wages in season, but not during the off-season. Allow industry to devise solutions to seasonal unemployment.
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Sven Otto Littorin was Sweden's Minister for Employment from 2006-2010. He was in charge of major policy reforms, including an overhaul of the unemployment insurance system and a complete renovation of the Public Employment Service. During the Swedish presidency of the European Union, he was President of the European Council of Ministers responsible for employment, social policy, health and consumer affairs, and as such he oversaw the EU response to the financial crisis of 2008-09. He is currently an independent adviser on change management, policy reform and related issues.
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