Catherwood LibraryILR School

According to a recent Organisation for Economic Co-operation and Development (OECD) report, Sweden leads the OECD in helping laid-off workers find new jobs—over 85 percent of displaced workers find new jobs within a year because of arrangements between employers and private social partners such as Trygghetsradet (TRR) – a job security council that helps workers with job counseling, financial and psychological support. TRR is funded by employers and is only for workers who are members of a union - about 70 percent of the Swedish workforce. Job-security councils were more effective than government-administered programs because they intervene immediately after a layoff and have financial resources that public re-employment offices can’t provide. While unions in other countries fight against job cuts, in Sweden, unions are more amenable to job losses as they know workers will be retrained to be more productive in other jobs. The idea is that workers should be supported rather than maintaining unproductive positions, while companies also benefit in being able to restructure for long-term success. Companies that have collective bargaining agreements pay 0.3 percent of their payroll annually into the job-security council that works with people in their sector. Companies will alert the job-security council when layoffs are imminent, with workers being matched with a counselor. Depending on their age and length of service, they also receive a stipend from the job-security council that helps defray costs. Failing to help workers find a new job can have negative impacts on the overall health of the economy. The growing number of people who have stopped looking for work in the United States depresses consumer spending, resulting in a less productive economy and a smaller economic pie. Sweden ranks as one of the highest labor force participation rates in the OECD, in spite of generous welfare programs. Its strong economy also provides evidence that powerful unions can have great effect when working cooperatively with companies.