Sweden sets employment example

By Peter Chapman

Date: 29/07/04

SCANDINAVIAN dynamo Sweden - not the US - should be the country the EU should be trying to emulate when it comes to job creation, European Commission experts will urge in September.

The message comes in a report on the Union's employment market that aims to offer member states ways to cut stubbornly high unemployment figures.

It says a comparison between the EU and US reveals a gaping hole in employment rates in the services sector, even though some countries, such as Spain and Ireland that once lagged far behind, have increased employment by more than 20% in 1998-2003.

But the report, compiled by economists working for Employment and Social Affairs Commissioner Stavros Dimas, suggests the EU has higher employment in many parts of industry.

Concentrating just on services and neglecting the industry would be a mistake, they argue. Any extra demand for industrial products can have a big spill-over on jobs - in both the industrial sector and in services. This is the case in nations with strong industrial sectors such as Germany.

Many differences in employment structure between the Americans and Europeans are down to far lower increases in household consumption demand in the EU than in the US, the report states.

These differences are attributed to issues such as the number of old people and women in work, and demographics.

The experts admit that the EU-US employment gap in services is most acute with women and older workers. They think Europe can benefit by improving their integration into jobs.

But Sweden - and not America - is cited as a more sensible benchmark for other member states - for its record of employment in the services sector in general.

This is particularly good in comparatively high-skill, high-paying sectors, such as business services, education, health and social work, where the Scandinavians have managed to put in a strong performance, more than making up for big job losses in industry, the experts say.

The UK, Denmark and the Netherlands also perform well compared to the US, with similar levels of employment levels in services and much higher rates in industry.

Sweden, not the US, should be the country the EU should be trying to emulate when it comes to job creation, European Commission experts will urge in September 2004 in a report on the EU's employment market.