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The state budget, due to be presented Monday, contains a proposal to drastically reduce employer contributions for young people between the ages of 19 and 23. The proposal will be implemented from April 1 next year and will cost the state nearly SEK 9 billion calculated on an annual basis.
It is one of the most important items in the budget, which in total will include reforms and crisis measures for more than 100 billion Swedish crowns.
– This will be a double profit for the jobs. On the one hand, costs are being drastically reduced for industries that are now going through the most difficult times, such as the service sector with commerce and the hospitality industry. The second benefit will be that more young people can keep their jobs and that more young people can find their first job, says Annie Lööf, party leader of the Center Party.
During the reign of the Alliance A similar reduction in employer contribution was implemented for youth. It was phased out after the change of government in 2014, in part because of evaluations that showed it to be an expensive measure that didn’t result in many new jobs.
“This is an effective measure, research shows,” says Annie Lööf.
Photo: Eva Tedesjö
Annie Lööf now highlights new research showing that the reduction had a greater effect compared to what previous surveys have found.
– This is an effective measure, research shows that has been looking at this for a long time. It’s a significant reduction in employer contributions because the price of not doing something would be much higher, he says.
Annie Lööf emphasizes that youth unemployment is rising dramatically in the wake of the crown crisis and that it is therefore important to provide companies with cost reductions that can stimulate new jobs.
– It’s about people’s future prospects. As a young person, reaching adulthood as an unemployed person has devastating consequences. At this time, many young people who have lost their part-time jobs or did not get a summer job are having a hard time finding a job. At the same time, we see that companies that tend to offer the first job to young people and newcomers are having a very hard time financially.
In recent years, a clear dividing line has emerged in the labor market between those with a secondary education and those without. Those who graduated from high school found it easy to get a job, while those who did not find it difficult to get into.
Wouldn’t it be better to invest the money in education?
– We do too. It is incredibly important to expand both polytechnic schools and universities across the country. It is also important to give young people the opportunity to complete their education or attend a new education. But beyond that, it is important to reduce the cost of hiring.
The reduction of employer contributions for young people will apply for two years.
Photo: Eva Tedesjö
The reduction in employer contributions for youth will apply for two years and will cost a total of SEK 18 billion to implement.
– It is about giving Sweden a new economic start and a head start for industries that are now going through the hardest time, and helping young people get back to work.
If it’s going to be an advantage for the industries that have it the hardest, why are they implementing an overall reduction in employer contributions?
– We need to implement this quickly. This is the simplest way to get the effect faster. We don’t need an investigation or a referral, but we can quickly implement a proposal that has an effect. This will have the biggest effect on the industries that have it the hardest, so we are moving forward with that.
Why is the reduction only temporary for two years?
– We see this as a crisis measure precisely to make things easier, for example, for trade and the hotel industry, which is going through a really difficult time.
The budget is coming also to include an extension of the cash deduction with more covered services and a higher ceiling for the deduction. As of January 1, it is proposed that the ceiling for route services be raised from SEK 50,000 to SEK 75,000 per person per year. New covered services are, for example, the assembly of furniture and the transport of household goods to flea markets or second-hand stores.
– We want to send a clear signal to companies covered by route services that this is an industry of the future, says Annie Lööf.
It is estimated that implementing the change to the cash deduction will cost approximately SEK 270 million and will be applied permanently.
The proposals to reduce employer contributions and change the square deductions have been negotiated between the Social Democrats, the Green Party, the Center Party and the Liberals.
