In 2005, the Swedish unemployment benefit fund was the second highest in the world, but five years later, Sweden was down to under average among the OECD (Organization for Economic Co-operation Development) countries.
That’s according to a fresh report on Sweden’s social insurances in a comparative perspective where the development of health-, work injury- and unemployment insurances are compared on the basis of an average industry worker’s salary. The report was commissioned by the parliamentary social inquiry. Several countries have bypassed Sweden when it comes to all three of the insurances. But it is the unemployment insurance replacement rate that has decreased the most and is now placing Sweden poorly: countries like Belgium, Denmark and Italy are all ahead and above.
The authors of the report call the decrease “remarkable.” Sweden is now on its way to leave behind what has been called “the Swedish model,” according to Joakim Palme, author and professor of Political Science. “The Swedish model has been built on the majority of the population getting something for their tax money. We have now reached a breaking point where not even Average Joe gets an adequate income protection from the general insurances. It’s no longer only high-income earners who need supplementary health insurance,” said Palme, who is one of former Swedish Prime Minister Olof Palme's sons.
According to the authors, the problem is those who need the supplementary insurances aren’t the ones who have them or can easily obtain them. It’s about insurances in several areas: Compensation in percentage has been lowered, the maximum compensation time has been shortened, and the income ceiling has not kept pace with the wage increases. The income ceiling—the maximum income on which the compensation is calculated—is one of the reasons the Swedish unemployment benefit is so low compared to other countries. In Sweden a full-time unemployed receives 80 percent of his salary for the first 200 days of his unemployment, then it falls to 70 percent. But since the maximum for unemployment benefit is 18 700 SEK ($2,626), only 12 percent of all unemployed, formerly full-time workers actually receive 80 percent of their salary.
And not only the unemployment benefit has fallen behind. Between 2005 and 2010, the actual compensation level of health insurance fell almost 5 percent. At the same time, we end up far down as the maximum time for the allowance ranks. In the case of work injury insurance, only five countries currently have lower levels than Sweden. Says Joakim Palme: “Social rights have gotten worse in general. It’s remarkable that Sweden is the country that has moved the most during the past five years, when it comes to social insurances.”