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Greatly praised report on globalisation

2018-06-05

Fredrik Sjöholm, left, and Fredrik Heyman.

The report Globalisering och svensk arbetsmarknad (Globalization and Swedish Labor Market, SNS 2018), written by Fredrik Heyman, IFN, and Fredrik Sjöholm, Lund University, affiliated to IFN, was presented on June 6, at a seminar organized by SNS (Centre for Business and Policy Studies). The accolades were many from those who commented on the report. "I have picked up the positive keynote of globalization and technological development," said Ylva Johansson (S), Minister for Employment. Carola Lemne, CEO of the Confederation of Swedish Enterprise (Svenskt Näringsliv), acknowledged “an excellent report”. Hans Stråberg, Chairman of Atlas Copco and SKF, also welcomed the report explaining that In many instances "the globalization has undeservedly been blamed for many problems in society”.  

Ylva Johansson.jpg
Ylva Johansson, Minister for Employment, found it interesting that the report shows an improved match between workers and companies.

 

"In general, globalization has been positive for the Swedish labor force, and wages have increased for most people. This trend has been superior for highly skilled labor, resulting in an increased wage spread", Fredrik Heyman said adding that "we see increased job polarization in so far that jobs with high qualifications and low-wage jobs increase, while those in the middle get fewer."

The report shows:

  • an improved match between workers and companies, especially in industries where Swedish exports are relatively high.
  • that multinational companies stack up better than companies that only operate in the local market.
  • reduced number of routine jobs, both low-wage jobs for example cashier jobs, and jobs higher up in payroll distribution, such as purchasing and brokerage jobs.

Another effect of the ongoing globalization, but also the technological development, as research shows, is that similar labor has different wages in different companies. Multinational companies and companies that export have more qualified employees and higher salaries. The proportion of less skilled employees is 40 percent in multinational companies, 50 percent in exporting companies and 70 percent in Swedish companies operating exclusively in the domestic market.

Fredrik Sjöholm explained that the wage spread has increased with the globalization, though much can be done to balance pros and cons.

"Globalization accounts for about 30 percent of the wage spread", he said, explaining that Swedish employees are well paid compared with most other countries. Sjöholm asked the rhetorical question of why Swedish workers are better paid and what can be done to ensure that the positive development in Sweden will not be forfeited? "The capital can easily move from one country to another, and the technology can be used everywhere. The same does not apply to well-educated employees. Here the state has one of its most important tasks to fulfill: a good education." "We must remember that Swedish workers will not continue to get higher wages in the future if they are not superior to Chinese workers", Sjöholm warned.

 

Panel.jpgFrom the right: Carola Lemne, CEO of The Confederation of Swedish Enterprise (Svenskt Näringsliv), Hans Stråberg, Chairman of Atlas Copco and SKF, Samuel Engblom, Social Policy Director, TCO, Mats Persson, Economical spokesperson for the Liberals, Fredrik Sjöholm, Professor Lund University and affiliated to IFN, and the moderator Mikael Witterblad, Head of SNS Research Programs.

 

The researchers and commentators agreed that Sweden should continue to promote global openness and trade, but this requires national initiatives for better education at all levels. Ylva Johansson spoke of significant reforms to strengthen skills. She explained that the individual must take responsibility for his or her training and retraining and that "the solution is closer to companies and industries."

Mats Persson (L) said that to cope with the international competition, Sweden must create better economic conditions for entrepreneurship than our competitors. Carola Lemne, CEO of the Confederation of Swedish Enterprise (Svenskt Näringsliv), explained that globalization is something positive. She, like the researchers, pointed to weaknesses in the Swedish education system that need to be addressed – "17 percent of students leave the nine compulsory years of schooling without a complete education, and 40 percent do not pass high school within the prescribed time.

Hans Stråberg, Chairman of Atlas Copco and SKF, suggested that Sweden has underlying competition problems. "The weak currency means that Sweden will be stricken when the business cycle turns. In this situation, the government proposes tax increases. That does not work."

Read the report  (in Swedish)

Read an op-ed in SvD about the report

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