Sweden Pays Jobless Youth to Move to Norway

November 1 (Telegraph) — A Swedish town has taken to paying people to look for work in Norway in an attempt to reduce soaring youth unemployment.

Under a scheme organised by the local authorities in the town of Soderhamn and by Sweden’s national employment office, anyone aged between 18 and 28 can volunteer to take a “Job Journey” to Oslo and attempt track down gainful employment.

Those who sign up get a ticket to the Norwegian capital and are put up in an Oslo youth hostel for a month, with Soderhamn council picking up the 20 a night bill. The package also includes on-the-spot guidance on how to get a job in Sweden’s northern neighbour.

“We had an unemployment rate of over 25 per cent, so we had to find solutions,” Magus Nilsen, the man in charge of the project at Soderhamn council, told the Daily Telegraph. “Going to Norway to find work has always been quite popular with young people, but sometimes they want to go but don’t know how to find a job or accommodation so we thought we’d give them a bit of help with both.”

So far around 100 people have decided to leave Soderhamn, a town of 12,000, 250 kilometres due north of Stockholm, to try their luck in the bright lights of Oslo, and some, at least, have struck gold.

After two years on the dole in his hometown Andreas Larsson opted for a “Job Journey” to Norway and now works as a lorry driver in Oslo.

“I came here on a Thursday and on Monday morning I had a job, so it was fast,” he told Swedish Radio. “It almost felt a bit unreal, as if you have come to the promised land.”

9 Responses

  1. Ok, bit is that the best they can do with that kind of unemployment rate? I thought these were socialists? Or is that the new neoliberals?

  2. In Norway the government target a government deficit of 4 percent of the value of its sovereign wealth fund. The value of the fund is over 100 percent of GDP. The fund is built around taxes from the petroleum sector, the oil companies sell currency for norwegian kroner to meet their tax liabilities. The norwegian central bank then use these taxes to buy back currency for placement in its sovereign wealth fund, minus the amount to finance the deficit. This net buying of norwegian kroner presumably leads to a strong currency, while the deficit stimulates the private sector. This attracts foreign workers, since jobs are plenty, unemployment low and the wages are high.

    Sweden on the other hand have a deficit far to low to keep unemployment at bay. However, the government seems to believe that it is because of low government dept that they were largely successful at recovering from the financial crisis so they are reluctant to deficit spending. Even tough they are not a member of the Euro and of course not revenue constrained. They are widely praised for their perceived sensible policies.

    The headline is somewhat misleading since it could be sensible for a municipality to send their youth to another country since they have to cover their welfare payments over their own budgets. However it would not surprise me if the the Swedish state implemented these policies as well. Note also that Norway only deficit spend because the government believes it can afford to due to foreign trade surplus. Actually it is a interesting case for MMT since Norway got low interest rates, low unemployment and a deficit of about four percent of GDP, and inflation below the central banks target of 2.5 percent.

    1. @Hoffa,

      What policy tools does the Norwegian government use to “target” the deficit number? Do they have an income tax? VAT? Does the tax system act as an automatic stabilizer, collecting more revenue as the economy grows? If so, what do they do to offset that effect and achieve the deficit target?

      And what’s going on with oil? Is it North Sea fields, and are they getting played out like Britain’s fields? If so, do they have a plan for a post-oil-boom economy? Would that be the purpose of the sovereign wealth fund?

    2. @Hoffa,

      “The norwegian central bank then use these taxes to buy back currency for placement in its sovereign wealth fund, minus the amount to finance the deficit.”

      I don’t get the math here. If there is a deficit, they spent all the oil tax money, and more. How is any of it left over to put into the sovereign wealth fund?

      1. @John O’Connell,

        They have a deficit target, however they let the automatic stabilizers work, so the deficit is supposed to balance around the target over the business cycle. They have been hitting their target pretty good recently, altough slightly above it. I guess they are doing nothing magical, just being lucky. In Norway nobody questions the governments ability to hit the target, however I believe they will be dissapinted. Unless the wealth fund grows very large.

        The wealth fund is supposed to be savings for future generations, which may not have any oil left. They also want to amass foreign assets to avoid currency appreciation. Norway got a floating exchange rate. If the central bank did not buy back currency from the banks after oil tax being paid, the private sector would run out of kroner. Since Norway got an overdraft system the central bank in the meantime lent the banks kroner, which they used to buy currency from the banks.

        Analytically it would have been easier if the oil companies paid foreign exchanges in taxes to the government. The government would then sell foreign exchange to the banking system in the equal amount as the deficit to finance it. The remainder would been transfered to the sovereign wealth fund for international investments. So with the deficit I mean they the government deficit spend in norwegians kroner, while having an overall surplus.

        Maybe I am wrong about the deficit spending is in norwegian kroner, since I would guess they the net assets the private sector would end up with would be foreign assets?

  3. Perhaps young Swedish males could be further encouraged to go the Norway by being informed of the fact that purchasing the services of the oldest profession is illegal in Sweden, but legal in Norway:-)

  4. It’s a 7 hour trip from somwhere that’s only 3 hours north of Stockholm…quite an indictment of the damage done to Sverige by a so called New Moderate party…

    On another note the Norwegian Conservatives lead Norwegian Labour with the far right “Progress” party still anathema but able to support a minority right wing government…the good times could start to unravel…mind you, they’d only have 2 years…right wing governments tend to be quite unstable in Norge.

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