The Tidölaget, our government, has lowered the activity support for the long-term unemployed to 5600 after tax per month from October 2025. But the government still expects long-term unemployment . The iron-hard wage law is strong. The citizens lowered social insurance during the Alliance governments of 2006–2014 . In the 2022 election, the Moderates wanted to cut the unemployment insurance fund and worsen health insurance again. At first it didn't happen, but in the spring of 2024 the Sweden Democrats backed down. From the autumn of 2025, the lowest final level of the activity support will be around 5600 after tax per month. The citizens want to motivate workers to work harder for a lower salary. For this reason, the citizens want to lower the reservation wage . That is why they tightened the social insurance and benefit systems in 2006-2014 out of faith in the iron-hard wage law.
Ahead of the 2026 election, the three red-green parties promise a more active labor market policy, but the level of ambition differs clearly. The Social Democrats are once again setting full employment as a long-term goal and want to address unemployment with investments, more vocational and labor market training, a stronger Public Employment Service and more paths to work. S also wants to mitigate the steep reduction in unemployment benefits, but has so far chosen not to promise a higher final level for activity support for the long-term unemployed.
The Left Party is the most progressive in the area of social security systems. The party wants to pursue an economic policy for full employment, increase public investment and strengthen active labour market policies. The unemployment insurance fund should provide 80 percent of the benefits for the entire benefit period, and the Left Party also wants to strengthen benefits for those receiving activity support. The party is also pushing for a general reduction in working hours with maintained pay.
The Green Party wants to create more jobs through investments in, among other things, railways, renewable energy, energy efficiency, welfare and green industry. The party wants to strengthen the Public Employment Service, education and pathways to work and improve unemployment insurance. The MP also promotes a general reduction in working hours and wants to move closer to a four-day week in the long term.
Save the unemployment insurance fund! Vote here.
The alliance wanted to lower reservation wages
The reservation wage may be below the collective agreement level. It is the lowest salary you are willing to accept when looking for a new job. This is in accordance with the principle of the iron-clad wage law. According to it, a lack of protection of labor law, social insurance and benefits leads to job seekers having to take jobs on any terms. Competition always pressures employers to keep prices as low as possible. Then they must lower the employees' conditions as much as the law allows. Thus labor law, working conditions and welfare in society regulate how the workers at the bottom, but also how we all fare.
Those who have been unemployed for a long time and have part-time sickness benefit are being saved by an increased housing supplement . However, the housing supplement does not provide pension points for old age. But the healthy long-term unemployed or disabled without part-time sickness benefit have a tough time. Perhaps these can supplement with income support or housing allowance? But income support often leads to such a vulnerable existence that many develop mental illness. The housing supplement is so stingy that it helps fewer and fewer people and has a form that often makes it a debt trap.
The worst possible job for more people was the goal
Under the surface, it felt as if the Coalition government's job policy was about strengthening the iron-fisted wage law so that everyone, even graduates and people with special skills such as plumbers, would solve their unemployment by taking the first job with the worst conditions they could find. In the long run, such competition leads to workers becoming unemployed instead of graduates. Then the unemployed workers have to become graduates to get jobs that normally only require upper secondary education. We need to have a society where people are largely allowed to try to do what they are suited for. New research shows that job seekers with good financial security look for jobs more effectively.
Hidden tax increases
At the same time as the citizens lowered the employees' visible tax, they greatly increased the wage tax, which is a hidden tax among the social contributions. The sharp increase in this enabled greater tax cuts for high earners, reductions in corporation tax and interest deductions for home owners, etc.
Sneaky reduced sickness benefit
In addition, the Alliance government escaped a moral outcry over their reduction of sickness benefit, which is still officially at 80% of salary. They did this by changing the calculation rules for the level of income qualifying for sickness benefit (SGI). The calculation changes reduced the level of sickness benefit by 15%. ( https://www.vf.se/asikter/ledare/alliansregeringen-lurade-alla-pa-lontagarnas-bekostnad/ )
Protect society's economy by investing in green technology and the public sector
One alternative is to invest in better conditions for the public sector and the workforce to increase competitiveness, including through green technology.
If someone only has high school qualifications, they can apply very broadly. But after an academic degree, it is a waste of society's resources for them to solve their unemployment by looking for jobs that require a high school diploma. The iron-clad wage law must not break society.
Looking for work a full-time job
Looking for work is a full-time job. But even unemployed people with at least a high school diploma such as a plumber, carpenter or other sought-after professional skills should be allowed to look for a job within their specialization for a sufficiently long period of time. Another would be to throw away the money and the years society and the student invested in the job seeker's education. For most people, it is impossible to work full-time and look for work full-time. We need to guide people to the work they are best suited for. That's where they will do the most good.
Unregulated competition slaughters wages
The employer is in a competitive situation. According to the iron-clad wage law, she must always push wages and working conditions and maximize the productivity of the workers under prevailing conditions. Only the capitalist with the cheapest product of a certain quality survives in the long run. That, as the Alliance did, worsen the conditions, such as social security for the jobseekers, and at the same time maximizing the requirements on how much and how widely the jobseeker needs to look for work, pressures the employer to double down the working conditions for their employees.
What happened during the Alliance 2006–2014?
- productivity (which is important for the rate of wage growth and for the economy to function) stopped increasing in 2007
- The Sweden Democrats became big, probably because labor immigration, even for low-wage occupations, was deregulated
- conscription was removed and we had a record weak defence
- places in police training decreased enormously
- the kidnappings of the millionaires increased
- the housing bubble burst
- unemployment increased
- the areas of exclusion became more problematic
- it became more difficult to study at Komvux
- 70-somethings and earlier generations had worse opportunities compared to the younger ones to study at university
- suicides increased drastically as people panicked about being evacuated
- Phase 3, where employers received grants to force the unemployed to do pretend jobs on social security only, became one of Sweden's largest workplaces
- it became more difficult to combine involuntary part-time unemployment with social security
- the principle of non-publicity was restricted in Sweden
- market rents were introduced for subletting residential rights
- The alliance removed the right to deduct union dues in the declaration to reduce the union's strength. This led to a mass exodus from the union
- the government made it so difficult to get unemployment benefits that only around a third of the unemployed could get it and at the same time lowered the allowance and doubled the difficulty of earning a higher unemployment benefit
- most labor market training was removed, which contributed to the job matching shortage that exists today in many sectors of the labor market
- The alliance removed the last housing subsidies for the construction of affordable rental units, fueling the housing bubble
Difference between right and left
In the future, bourgeois dream society, enormous differences in wealth prevail. There is no free school, care or care to speak of. Everyone gets to work extremely hard thanks to a deregulated labor law. It is easy to lose one's job and there is high unemployment with low compensation levels in the social security fund, if any. The iron-fisted wage law strikes fear in the people. The rents are maximized and the standard often deficient. It is difficult for many, but especially for those on low incomes, to afford entertainment. Many jobs are dangerous and the working environment is bad. The bourgeois utopia means unlimited freedom for the owners of capital and gives everyone else the freedom to choose between working themselves to death or starving. (See e.g. Klein, Naomi, «Shockdoctrinen Katastrophe kapitalismens penrombrot», Ordfront förlag (Stockholm, 2008) S. 13)
This anti-society does not arise immediately, but it is where the citizens want to be in the long run.
Worsened conditions for the public sector
The main thing the Alliance's job policy led to was less resources for public employees (such as nurses and teachers), the unemployed, those on sick leave, disability pensioners and less resources for public services such as railways . Nor can the job policy have been considered to create more jobs. But the public sector is extremely important for a functioning society.
Many of the jobs that were created through tax cuts cost about 1 million per year and job. That is, for the same money as one job created through tax cuts, you could have created at least two good jobs by expanding the public sector.
The researchers strongly question the connection between high wages and generous welfare and high inflation. Inflation instead occurs when productivity is too low in relation to the money supply. Lower wages, lower taxes, lower social insurance and too low government deficits can lower productivity. Read more here.
The rigid wage law is not a good model to build a democracy on.
Save the unemployment insurance fund! Vote here.
The language that Anders Borg uses again is that the good path for the welfare and development of society can be called extremism. Good becomes evil. Moving forward for the good of the people and community is a backward striving. They can call it communism.
It is also fundamentally true that capitalism and communism are in many ways siblings.
Communism, in its state-capitalist form, allows the state to own the means of production and thereby risks making man a collective property under the state.
But the other extreme can lead to a similar problem and does so
When the market and private capital gain supreme power, the person, the household, the nation and ultimately the planet risk becoming a means to the ends of capital.
We are in a time where profit and financial return are the real goal. Debt is a constant driver of the economy, while human needs and the common building of society are subordinated to the demands of the market.
What was once built as a path towards the welfare state – with education, housing, infrastructure, security and joint investments – therefore risks being transformed into a market state, where more and more parts of life are considered economic assets and markets.
It is a form of anti-development: the economy develops technically and financially, while the common life is weakened. When short-term returns are allowed to guide long-term decisions, both social cohesion and the relationship to the Earth's ecological boundaries can be disrupted.
The crucial question becomes why not who owns the capital – the state or the market. The bigger question is:
What should the economy be for?
A society where the economy is a means to human development, the common good and a sustainable relationship with the earth must place humans and the future as goals – and capital as a means.