For Swedes, Jobless Rate Is High

But the country leads the way in Europe in finding ways to keep the unemployed active

UNTIL recently, Jorgen Tonnes worked at an industrial bakery here, but it will be a while before his hands are white with flour again. Like thousands of other Europeans each month, Mr. Tonnes finds himself joining Europe's nearly 20 million unemployed.

Trained in computer sciences, Tonnes represents an especially worrying segment of those jobless: young men and women who had expected in early adulthood to be setting the first building blocks of a career. But now Tonnes is even out of the make-do job he had taken until something came along in his field.

With few prospects on the horizon, Tonnes could end up on the dole. "It used to be that anybody who really tried could find a job, but in these times it's not so true," he says. "At less than a year I wasn't even in the baking enterprise long enough to claim full [unemployment] benefits, so if I can't get by, I might have to go on welfare."

That is a discouraging prospect for Tonnes. But one factor working in his favor is that as a Swede, he lives in a country where the emphasis is placed on keeping as many jobless as possible active in their unemployment.

It is an idea that has been pushed for years in Sweden, but has recently gained more attention: With the ranks of the long-term unemployed growing, Europeans must find ways to keep the unemployed motivated and in the job market, and to develop their skills or keep current those they already have.

The European Community, to which Sweden has applied for membership, released a preliminary report last week on a wide-ranging program for creating jobs in a slow-growth period. The program places particular emphasis on "active" unemployment measures such as training. The EC spends only about one-third of all unemployment benefits on "active" measures, while Sweden spends about two-thirds.

"The goal of the Swedish government has long been to avoid sedentary unemployment," says Mats Wadman, assistant undersecretary for employment at the Ministry of Labor. "Not one of our political parties opposes that strategy."

"The problem for us now is that with unemployment rising so fast, the goal becomes more difficult to reach," he adds.

Sweden's official unemployment rate is about 7.5 percent - low compared with many European countries, but shockingly high for Swedes when compared with the average 2 percent unemployment over the second half of the 1980s.

With the 200,000 Swedes in various training programs added to that figure, total unemployment rises to about 12 percent, similar to the rate in Denmark, Britain, and France.

The highly developed training programs have been considered a success in the past, but as the recession has deepened, post-training placement rates have tumbled. Throughout the 1980s, 60 to 70 percent of those who had undergone retraining found new jobs within six months. By 1991, that number had fallen to 50 percent. Last year it plummeted to 28 percent.

"The government's policy now is to use the recession to retrain and increase the skills level of the work force," says Asa Pettersson, head of labor market policy at Sweden's labor ministry. "The recession is also pushing us to look into some new ways of helping the idly unemployed."

Under one plan, the government pays up to 60 percent of a new employee's salary for the first six months. Under another plan, designed to increase youths' skills, the government pays 100 percent of a salary for up to a year for a worker under 26 years old.

"The idea in the youth program is not so much, as in the first one, to see the job prolonged," Ms. Pettersson says, "but to help young people develop a solid skill and experience so they are then in a better position to find long-term employment."

Another program allows an unemployed person to collect from the government up to six months of his old wages to start up a new company. This plan has actually existed for a decade, but has "exploded" in the past two years, Pettersson says, as a more "entrepreneurial" and better-educated generation has been hit by the recession.

No one touts the "active unemployment" schemes as a cure for unemployment, of course. Many economists and officials in Sweden's conservative government say more emphasis must be put on loosening up the country's highly regulated economy so that companies will create jobs without government enticement.

"The greatest need in our labor policy is more flexibility," says Olof Ehrenkrona, director of planning in Prime Minister Carl Bildt's office.

"Companies are discouraged from hiring in an uncertain economic period because with all the costs involved, any new hires can end up a very expensive mistake if anticipated growth doesn't materialize," he says. "And if we have so many young people unemployed, it's largely due to stiff regulations. The company that has to reduce staff has to drop the young first - even though they may be the most desirable and productive employees."

Indeed, Europeans are exploring ways to make new hires less costly for companies. But until economic growth rebounds, a certain emphasis will be placed on keeping the unemployed busy.

Denmark, which currently spends more than 6 percent of GNP on unemployment benefits - a record among Western countries - is paying particular attention to the issue.

Reeling under an unemployment program developed in the 1970's, when jobless rates were very low, Denmark pays 90 percent of a lost salary (capped at about $22,500) - with renewal provisions making collection of that amount possible for up to nine years.

"With those benefits, there is no incentive to look for work, especially for the low-skilled and lower-wage earners," says Henning Gade, assistant director of the Danish Employers' Confederation (DA).

Efforts to lower compensation to 80 percent have so far been unsuccessful, but training requirements have been implemented.

New ideas being considered include job "rotation," which calls for an unemployed person to stand in for the worker going out on skills training. Another is a "sabbatical" program, where the unemployed would replace workers who are on a leave of absence and earning 70 to 80 percent of their salary for such personal enrichment as education and travel.

"What we like about these ideas is the new acceptance of flexibility they point to," says Kaj Ove Christiansen, labor market policy advisor at DA.

Experts do not expect to see the kind of growth necessary to start bringing down record-high unemployment until 1994, Mr. Christiansen notes.

But surveys among employers show that steps can be taken to make enterprises less leery of hiring or working with the unemployed.

"Our conclusion is to go for flexibility now," Christiansen says, "so that when growth does come back, Denmark will have a more effective labor market."

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