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Labour market.

5.1 Summary

The swing in the labour market in the last two years--from definite overheating to a situation with almost 3 per cent unemployment and clearly declining employment in the summer of 1991--is evident from Diagrams 5.1 and 5.2. The number of unfilled vacancies began falling towards the end of 1989, after which there was a steep, general drop to a very low level in the summer of 1991. This was accompanied by a rapid increase in notices of lay-offs and discharges.

Employment was still tending to rise in the first quarter of 1990 but then levelled out in the rest of the year and definitely began to fall in 1991. The number of persons in the labour force went on rising in 1990 but the weak labour market caused the rate to slacken; in 1991 labour supply has fallen, though not as sharply as employment. This has widened the gap between labour supply and demand--unemployment has risen, from 1.3 per cent in the first quarter of 1990 to 3 per cent in the summer of 1991.

A marked fall in the total number of unfilled vacancies began, as mentioned above, around the turn of 1989. A decline had been in progress for a year in mining and manufacturing but total labour demand was still sustained in 1989 by the services sectors. Since then, the number of unfilled vacancies has fallen in all sectors, reaching notably low levels in the summer of 1991. A similar picture of demand is given by the Business Tendency Survey data on shortages of industrial workers and salaried employees. Starting from extremely high shortages of workers in particular in 1988 and the first half of 1989, the series have fallen to record lows in the summer half of 1991.

The previously strong growth of labour supply slackened during 1990, mainly due to a renewed drop in participation rates for youth, a group that is notably sensitive to economic activity. Population growth accordingly contributed the greater part of the increase in supply, 0.9 per cent, from 1989 to 1990. This year the weak labour market has also tended to lower participation rates in the age group 25-64 years, which is leading to a seasonally-adjusted contraction of the labour force during 1991.

Labour supply in hours rose 0.7 per cent from 1989 to 1990. Excluding calendar differences between these years, the increase amounted to 1.0 per cent.

The number in employment levelled out in 1990 (Diagram 5.2). As the number had risen substantially during 1989 and to some extent in the first quarter of 1990, however, the annual increase from 1989 to 1990 was comparatively strong, more than 40,000 persons or 0.9 per cent. The increase occurred mainly in construction, private services and local government authorities. The increases in the latter two categories came mainly in 1989; in 1990 employment clearly slackened for private services and was unchanged for local authorities. Industrial employment fell sharply during 1990, bringing the annual level down almost 30,000 from 1989.

In the first half of 1991 the Labour Force Surveys indicate that the number in employment was 30,000 persons or 0.7 per cent lower than a year earlier. The number of hours worked also fell 0.7 per cent, indicating no change in average hours worked. Employment for youth fell by 40,000, accompanied by no change for men aged 25-64 years and a slight increase for women of that age.

With the substantial reduction of industrial employment in 1990 and 1991, the Labour Force Surveys indicate that the level fell almost 50,000 between the first halves of these years. At the same time there was little change in the numbers employed in private services and at local authorities. In construction there was actually an increase, though largely as a result of the growth of employment there in 1990.

Unemployment, which had been very low since the turn of 1988, began to rise in the summer of 1990. With the subsequent increase, the seasonally-adjusted rate in the summer of 1991 was almost 3 per cent compared with annual levels of 1.4 and 1.5 per cent, respectively, for 1989 and 1990. Besides affecting youth, a group that is particularly susceptible to economic activity, the increase occurred to a notable extent among men aged 25-54 years, a reflection of the weak industrial activity. In 1989 the number of unemployed aged 25-54 years was just over 15,000 for men as well as women, while in the summer of 1991 the numbers were just over 25,000 women but 40,000 men.

The labour market outlook in the second half of 1991 and in 1992 is considered in section 5.7 in connection with productivity estimates.

From 1990 to 1991 the number in the labour force is expected to fall 5,000 and labour supply in hours 0.5 per cent. The volume of hours worked is expected to drop 1.7 per cent. Unemployment would then rise 1.2 percentage points to 2.7 per cent, while the number in employment would fall about 60,000.

In 1992 the number in the labour force is expected to be unchanged. Labour supply in hours is estimated to rise 0.2 per cent; with a fall of 0.6 per cent for demand in hours, unemployment would then rise 0.8 of a point to an average of 3.5 per cent for 1992. The number in employment would accordingly fall more than 35,000.

The wage bill paid out rose 12.4 per cent from 1989 to 1990 and wage bill costs 11.6 per cent. The growth of employment accounted for almost 1.5 points, implying that wage costs moved up 10.1 per cent. The increase in total hourly costs (including effects of the tax reform) was likewise just over 10 per cent. Industrial wage costs are calculated to have risen 9.5 per cent.

For 1991, wage settlements, including the cost of longer holidays, are estimated to yield about 3 per cent and total hourly costs are calculated to rise almost 6 per cent. With a downward effect of just over 1 per cent for the contraction of employment, this gives an increase of 4.6 per cent for wage bill costs. Due to changes in social charges and effects of the tax reform, total hourly costs are rising 1.5 points more than wage costs.

For 1992 wage costs are estimated to rise 5 per cent. With some contraction of employment, the wage bill paid out (excluding sick wages for the first 14 days of illnesses) would then increase by 4.6 per cent.

5.2 Labour supply

5.2.1 Persons in the labour force

In 1990 the number in the labour force rose more than 40,000 or 0.9 per cent, mostly as a result of population growth. The level of participation went up only 0.1 per cent.

In the first half of 1991 the calculations indicate that the number in the labour force was 0.2 per cent higher than a year earlier; persistently strong population growth offset a sharp fall in participation rates. The overall participation rate was 0.5 per cent down on the first half of 1990, when it was exceptionally high. In the main age group 25-64 years, the fall in the first six months of this year was largely confined to men, for whom the rate has steadily fallen from a high in the second half of 1990. Participation by women in this age group was largely unchanged in the first half of 1991; the quarterly data show a slight increase in the first quarter and a fall in the second. Following an upward trend for most of the 1980s, labour force participation by women is now 10 percentage points higher than in 1980.

The decreased participation is most evident for youth (16-24 years), an age group that is particularly sensitive to economic activity. Participation by women as well as men in this age group had already reached a high at the end of 1989 and the subsequent decline has accelerated in recent months with the weakening of the labour market.

Population growth between the first halves of 1990 and 1991 amounted to 0.7 per cent. The increase was confined to the age group 25-64 years, with decreased numbers in the youngest and oldest age groups.

Net immigration went on falling and the level in the first half of 1991 was considerably lower than a year earlier. Annual net immigration in 1991 is estimated to stop at just over 22,000 compared with 35,000 in 1990. In the second half of 1991 participation rates are expected to go on falling; this applies to youth in particular but an accentuation of the negative tendency is also foreseen for the older groups. This outlook assumes that labour supply successively adapts to a persistently weak labour market with rising unemployment. The decline can also be seen as a return to a more "normal" level after the exceptionally high participation rate in 1990. Increased efforts for training as part of labour market policy are also tending to lower labour force participation, particularly among youth. Our forecasts indicate that in 1991 the overall participation rate will fall.

The population is continuing to grow in the rest of this year, though somewhat more slowly than in the first half. The net effect of this and the change in participation rates is calculated to reduce the number in the labour force in 1991 by 0.1 per cent.

In 1992 the overall participation rate is expected to go on falling but at a slower rate than this year, reaching a low in the second half. Labour supply from men is assumed to fall to a greater extent than from women, for whom the cyclical decline will probably be counteracted by the rising long-term trend.

Population growth is expected to continue at a diminishing rate. Together with the change in participation, this is calculated to leave the number in the labour force largely unchanged from 1991 to 1992.

Net immigration in 1992 is put at about 20,000 persons.

5.2.2 Labour supply in hours

In addition to the size of the labour force, the hourly supply of labour is affected by average hours worked and long-term absenteeism. In 1990 average hours worked (the combined effect of individual changes in working hours, short-term absenteeism and overtime) rose 0.2 per cent.

In the first half of 1991 average hours worked fell as much as 0.7 per cent. Part of this fall might be explained by the addition of two days to the annual holiday for large parts of the labour force. However, the registered change in the first half of this year is probably a conjunctural phenomenon. At branch level the fall in average hours comes mainly from construction, manufacturing, distributive trades, hotels and restaurants; with the exception of construction, it is also in these branches, which are comparatively sensitive to economic activity, that employment fell most steeply. Decreased employment is generally preceded by a reduction of overtime, which shows up directly in hours worked. The self-employed have the largest share of "overtime" and hours worked have fallen for this group to a greater extent than for employees. A breakdown by gender show that hours worked fell mainly for men, for whom it can be noted that the reduction is much the same in the various age groups, whereas for women average hours have fallen only for the youngest, with an increase instead for women over 25, giving a largely unchanged level for all women. It is conceivable that the tax reform contributed to the longer average hours for older women. Given that the reform does tend to stimulate labour supply, it is primarily the more adjustable hours worked by women that should be influenced.

A sharp reduction of long-term absenteeism caused the number of hours worked to rise 0.7 per cent, which fully offsets the reduction of average hours worked. A large part of the drop in long-term absenteeism is attributable to lower absence for sickness, with little change in the other components, for instance national service, study and child care. The fall in long-term absenteeism was most marked in the first quarter of 1991 but it was also appreciable in the second quarter.

In the second half of 1991 average hours worked are expected to fall 0.9 per cent, a change that is fully explained by the extended annual holiday. In 1992 average hours worked are assumed to be unchanged. Long-term absenteeism is assumed to go on falling by 0.2 per cent in the rest of 1991, followed by a further decline at the same rate in 1992, when increased efforts for rehabilitation are assumed to contribute to the tendency.

Under these circumstances, labour supply in hours rose 0.2 per cent in the first half of 1991 even though participation rates and average hours worked both fell. The increased supply came from population growth and greatly decreased long-term absenteeism. With a further marked lowering of participation rates in the rest of the year, however, the annual supply in hours will fall 0.5 per cent in 1991. In 1992 we foresee a further fall in participation rates but no change in average hours. With population growth and a continued reduction of long-term absenteeism, the net annual effect on labour supply in hours in 1992 would be slightly positive.

5.3 Labour demand

Labour demand, approximated here as unfilled vacancies, was high until the spring of 1990, after which it has fallen exceptionally rapidly. Previously, demand had risen steadily ever since the low in 1982-83. The number of unfilled vacancies peaked in September 1989 at 58,000 compared with the current level of less than 18,000.

The pattern of labour demand is much the same in the various branches apart from differences in timing. In manufacturing the decline had already started in the autumn of 1988 and the number of unfilled vacancies is now little more than 1,000 or roughly one-tenth of the peak in 1988. In construction unfilled vacancies had dipped at the end of 1987 but this is probably explained by a shift from project employment to permanent employment for construction workers. A temporary increase in unfilled vacancies was discernible at the end of 1989 but today the shortage of construction workers seems to be virtually non-existent.

In public services it is more difficult to detect a clear downturn, which is understandable considering the heterogeneous nature of this category; the series is also disturbed by changes in the routines for reporting holiday stand-ins. The number of unfilled vacancies now seems to have levelled out at around 10,000. In trade and other private services, labour demand did not fall appreciably until some way into 1990. Since then the pattern has been the same as in the rest of the economy, a veritable slump in labour demand.

Labour shortages in mining and manufacturing and in construction are reported in the quarterly Business Tendency Surveys. The proportion of firms, weighted for size, reporting shortages of various labour categories is shown in Diagram 5.5. These data also show a steep fall in labour demand for all occupational categories. In June 1991, for instance, the shortages of skilled workers and salaried technicians were even below the low figures in 1982.

5.4 Employment

During 1990 the seasonally-adjusted number of persons in employment according to the Labour Force Surveys was largely unchanged, having risen at an annual rate of rather more than 60,000 during 1987, 1988 and 1989. Around the turn of 1990 employment then began to fall comparatively sharply (Diagram 5.2) and the level in the summer of 1991 was appreciably lower than in 1990.

From 1989 to 1990 the number in employment rose more than 40,000 or 0.9 per cent. The increase was divided more or less equally between men and women. Among youth (16-24 years), where a relatively strong increase had been noted in 1989, the number fell back, mainly due to a declining participation rate. The surveys indicate that the number of hours worked rose 1.0 per cent, which gives a marginal increase of 0.1 per cent in average hours worked per person in employment.

The change in total employment from 1989 to 1990 according to the National Accounts agrees with the Labour Force Surveys as regards the number of persons (0.9) as well as the number day-adjusted hours (1.0). The increase in hours actually worked was somewhat less, 0.6 per cent, because 1990 had fewer workdays than 1989 and this is not allowed for in the Surveys.

The sectorwise development of employment according to the National Accounts is presented in Table 5.5. For the change from 1989 to 1990 the discrepancy between the sum of the branch estimates and the total is relatively large. It should also be noted that the calendar effect lowers the change in the volume of hours between the first quarters of 1990 and 1991 by 2 1/4 percentage points.

In the business sector the sum of the branch estimates for the National Accounts suggests that total employment was largely unchanged in persons as well as hours from 1989 to 1990. This is probably an underestimate because it is reasonable to assume that the business sector accounts for a substantial part of the increase in the discrepancy (corresponding to about 30,000 out of an increase in total employment by just over 40,000).

At sector level, increases from 1989 to 1990 are shown by the National Accounts for construction (almost 10,000) and private services (25,000). The latter increase occurred mainly in the course of 1989, with a more subdued rate in 1990 due to falling employment in distributive trades, hotels and restaurants. As shown in Diagram 5.6, the seasonally-adjusted number of industrial workers began to fall steeply around the turn of 1989. The annual drop in total industrial employment from 1989 to 1990 is put at about 3 per cent in persons as well as hours. Employment went on falling, moreover, in agriculture and forestry.

In the public sector the number of employees is calculated to have risen 1989-90 by about 10,000. Mainly as a result of fewer conscripts, employment at central government authorities is calculated to have definitely fallen. For local government authorities the total number employed rose 17,000, including a reduction of 4,000 in job-creation measures.

In the first half of 1991 the Labour Force Surveys indicate that the number in employment was more than 30,000 or 0.7 per cent lower than a year earlier. The drop came entirely from youth (16-24 years), the age group that is particularly sensitive to economic activity. The level of hours worked also fell 0.7 per cent, implying no change in average hours worked including long-term absenteesim. As the first half of this year had fewer workdays than the first half of 1990, the number of hours actually worked fell more than this, just over 1 per cent.

The drop in employment between the first halves of 1990 and 1991 is entirely explained by marked cuts in mining and manufacturing together with the ongoing decline in agriculture and forestry. An increase is reported for construction but his was a consequence of growth during 1990, followed by little change in the first half of this year. In private services the seasonally-adjusted level of employment went on rising in 1990, though the rate clearly slackened; during 1991 there has been a downturn due to cuts for distributive trades, hotels and restaurants, accompanied by a definitely slower increase for other private services. As a result, the total level of employment in private services was unchanged between the first halves of 1990 and 1991. For local government authorities the seasonally-adjusted number of employees was largely unchanged during 1900 and the first half of 1991.

The employment forecasts for 1991 and 1992 are presented together with productivity estimates in Section 5.7.

5.5 Unemployment and labour market policy

Unemployment, which had been very low throughout 1989, began to rise in the summer of 1990. Still, the annual increase 1989-90 according to the Labour Force Surveys stopped at 8,000 and the average level of unemployment in 1990 was 69,000 persons or 1.5 per cent of the labour force.

In the first eight months of 1991 unemployment has gone on rising sharply (Diagram 5.1). It is notable that the level for men has risen considerably more than for women; the levels for men and women aged 25-54 years were much the same until February 1991, after which there has been little change for women but a marked increase for men. This may be explained in part by the sharp increase of unemployment in manufacturing in the latest half-year. Statistics from the Labour Market Board indicate that in July 1991 industrial unemployment funds had almost 40,000 members out of work and more than 70 per cent of the members are men.

Unemployment is also high among members of other funds, such as distributive trades and construction. In the case of trade, about 13,000 insured persons were out of work in the summer of 1991, the highest figure since 1979.

The increase in unemployment this year has been particularly sharp among youth. In the summer of 1991 more than 40,000 aged 16-24 years were out of work, which is twice the seasonally-adjusted level in the winter of 1990. The number of unemployed aged 25-54 years also douled in this period.

Notices of lay-offs or dismissals affected almost 32,000 persons in 1990, a clear increase from 1989. More than 70 per cent of the notices concerned manufacturing.

In the first half of 1991 the number of notices went on rising very sharply to a total of more than 114,000 persons. This can be compared with the earlier record of 90,600 persons during the 1981 recession.

More than 60 per cent of the notices were dismissals, which accordingly affected about 70,000 persons in the first half of 1991, of which 40,000 in manufacturing. This is reflected in the high unemployment rate there.

Efforts of labour market policy were scaled down by degrees up to 1990 but this tendency changed in the first half of 1991. As the labour market weakened, steps have been taken to expand labour market training, special induction training and redundancy training. The number of persons in relief work rose only marginally. Compared with the weak situation in 1983-84, the number in relief work this year is considerably lower; the difference amounts to about 50,000. Employment with recruitment support has fallen from earlier years. The number in sheltered employment, employability assessment activities (AMI), wage subsidy jobs and archive work was largely unchanged; these activities are comparatively independent of the situation in the labour market.

The number covered by measures of labour market policy in the first half of 1991 totalled 151,200. This is 16,500 more than a year earlier, accompanied by an increase of 42,000 in unemployment.

5.6 Regional development

The annual population figure rose more than 67,000 in 1990, which is 12,000 more than the year before and the largest increase since 1970. An increased surplus of births over deaths contributed and so did high net immigration. While immigration did fall in 1990, the level was still high. Population growth was strong in the metropolitan countries as well as in the group of other countries; the level also rose in the forest counties, for the third year in succession.

In the first half of 1991 the population continued to grow but the rate slackened to 58,000 from the first half of 1990. Half of the increase occurred in the group of other countries, three-quarters of the other half in the metropolitan countries and the other quarter in the forest counties.

The comparatively favourable population trend in forest counties is partly explained by a better labour market there in 1989 (Diagram 5.9). During 1990 the labour market weakened once more. The number of unfilled vacancies was more or less halved, followed by an unchanged, very low level in the first half of 1991.

The number of insured unemployed, having fallen in 1987 and 1988, followed by a persistently low level in 1989, began to rise again in 1990 and increased sharply in the first half of 1991. In the first half of this year the Labour Force Surveys give an unemployment rate of 3 per cent in forest counties, which is one percentage point above the rates for the metropolitan counties and the other counties.

In the metropolitan counties the labour market was overheated, with large labour shortages, in 1988, 1989 and the first half of 1990. This is illustrated in Diagram 5.9, where the number of unfilled vacancies clearly exceeded the number of insured unemployed in that period. In 1989 the unemployment rate according to the Surveys was very low, averaging 1.0 per cent. In 1990, however, the Labour Market Board reports that the number of insured unemployed began to rise and the number of unfilled vacancies fell. These tendencies were greatly accentuated in the first half of 1991, with an exceptionally large gap between vacancies and unemployment. According to the Surveys, however, the unemployment rate is still fairly low, just under 2 per cent for the first half of this year.

In the other counties unemployment has also risen and unfilled vacancies have fallen since the summer of 1990. According to the Surveys, the unemployment rate in the first half of 1990 was 2.2 per cent, almost 1 point higher than a year earlier.

5.7 Production, productivity and employment

Present calculations and forecasts for changes in productivity and employment in the period 1990 -- 92 are given in Table 5.11. The substantial slowdown in the growth of production 1989 -- 90 was accompanied by a clear slackening of employment. Measured from the expenditure side at factor values, GDP rose 0.6 per cent and the calculations accordingly indicate a marginal fall in productivity.

In the business sector the National Accounts show little change from 1989 to 1990 in production as well as productivity. The figures for private services likewise show unchanged productivity, while the growth of production clearly slackened to 1 per cent. In mining and manufacturing both production and employment were cut substantially in 1989 -- 90 and productivity gains remained weak. In construction there was some growth of production 1989 -- 90 but productivity is calculated to have fallen 1 per cent. In agriculture and forestry, on the other hand, productivity rose comparatively strongly; this had to do with high production in 1989 and 1990 as a result of favourable weather.

The production of public services rose almost 1.5 per cent. The method for calculating production here does not take productivity changes into account. The registered growth of productivity in this sector accordingly reflects changes in the composition of employment, with fewer conscripts and a contraction of job-creation measures.

In 1991 production is falling. GDP calculated from the expenditure side at factor values is expected to drop almost 1 per cent. Employment is calculated to fall even more steeply, by 1 3/4 per cent, giving a productivity increase of 0.9 per cent.

It should be noted that the contraction of business sector production by 1.4 per cent in Table 5.11 includes a production residual. For 1991 GDP measured from the expenditure side differs substantially from estimates in terms of production and the residual is therefore unusually large, 0.7 of a point. The sum of the production estimates for branches of the business sector accordingly gives a fall of more than 2 per cent for the total business sector. As calculated for Table 5.11, total business sector productivity is rising 11/4 per cent from 1990 to 1991.

The production of private services is estimated to rise 1 per cent and productivity is expected to improve by about 1.5 per cent. In mining and manufacturing the notably marked and largely parallel cuts in production and employment are continuing. In construction there is the prospect of some fall in production as well as productivity.

Hourly employment in the production of public services is estimated to rise 0.7 per cent, which would be half as much as in 1990. The increase in the central government sector is expected to be much the same as for local authorities.

The estimates of labour supply indicate that the number of hours offered is falling 0.5 per cent in 1991. In relation to the development of demand in hours as shown in Table 5.11, this points to a 1.2 point increase in unemployment from 1990 to an annual rate for 1991 of 2.7 per cent.

The number in employment is calculated to fall from 1990 to 1991 by 60,000. As much as 75 per cent of this drop is estimated to occur in mining and manufacturing. The number employed is also expected to fall by almost 10,000 in private services and by about 5,000 in agriculture, accompanied by little change in the public sector.

In 1992 business sector production is expected to pick up again and this, together with the cuts and rationalization in 1991, is calculated to permit a 2 per cent increase in productivity. Employment, which is expected to reach a low in the summer of 1992, would then fall about 1 per cent 1991 -- 92. Production in mining and manufacturing is expected to start rising again after the sharp drop in recent years, accompanied by a clear improvement in productivity. In construction there is the prospect of some expansion of production in 1992, partly as a result of investment proposals by the government this autumn. Productivity growth is likely to be weak. The production of private services is calculated to rise 1 3/4 per cent and with decreased employment this would give a productivity gain of 2.5 per cent.

The growth of employment at public authorities is calculated to go on slackening to only 1/4 per cent, with an increase of 0.5 per cent for local authorities and a fall of over 1 per cent in the central government sector.

GDP, calculated from the expenditure side at factor values, is estimated to rise 0.9 per cent in 1992; with a productivity gain of 1.5 per cent, employment would fall 0.6 per cent. As labour supply in hours is calculated to rise 0.2 per cent, the estimates point to an increase in unemployment by 0.8 of a point to an average of 3.5 per cent for 1992.

Labour supply in 1992 is calculated to be unchanged in persons from 1992, in which case the number in employment would fall more than 35,000. The number is expected to drop more than 20,000 in private services and more than 15,000 in mining and manufacturing, accompanied by smaller reductions in agriculture and forestry. Little change is foreseen for total public sector employment, cuts in the central government sector being offset by some increase for local authorities.

5.8 Wage costs

5.8.1 All employees

In 1990 wage costs for all employees rose 10.1 per cent from 1989, of which 6.1 per cent came from nagotiated increases and 4.0 per cent from wage drift. Together with increased employment, wage bill costs rose 11.6 per cent. The wage bill paid out grew somewhat more than this because retroactive wages in the public sector were paid out in 1990. Social security charges raised hourly costs in 1990 by 0.1 of a point.

During 1991 the wage rise has been markedly curbed. Settlements in line with the stabilization agreement from the Rehnberg Commission have been concluded for the greater part of the labour market. Together with a carry-over from 1990 and the cost of longer holidays, the current settlements are estimated to give a negotiated increase of 3 per cent for 1991, which is half as much as in 1989 and 1990. Wage drift has slackened, mainly because labour demand is so much weaker. But as the high wage increases during 1990 also affect the level of costs in 1991, wage drift between these years is estimated to reach almost 3 per cent, giving an overall increase in wage costs of almost 6 per cent. With altered rates for social security charges, including the broader bases that are part of the tax reform, total hourly costs are estimated to rise a further 1.5 per cent. With decreased employment, wage bill costs are calculated to rise 4.6 per cent and the increase in the wage bill paid out will be somewhat lower.

The existing wage agreements apply in 1992 as well, which means that wage increases will remain subdued. Negotiated increases are estimated to average just over 3 per cent, together with just under 2 per cent for wage drift as labour demand will be persistently weak in 1992.

As of 1992 employers are to be responsible for a sick wage for the first 14 days of an illness, which adds to the wage bill. Given a slight fall in employment, the increase in wage bill costs excluding sick wages amounts to 4.7 per cent (6.5 per cent including sick wages). The wage bill paid out will rise somewhat less. Sick wage costs are offset by decreased payroll charges and the overall increase in hourly costs is accordingly estimated to be about 5 per cent.

5.8.2 Industrial employees

Monthly earnings statistics from Statistics Sweden show that from 1989 to 1990 hourly earnings for industrial worker rose 9.5 per cent. The rise of industrial wage costs for salaried staff was 9.4 per cent. Social costs raised the level of hourly costs by 0.1 of a point. Total hourly costs for all industrial employees accordingly rose 9.5 per cent in 1990.

In 1991 the rise of industrial wage costs is estimated at just under 6 1/2 per cent for settlements and wage drift combined. Including increased social charges, total hourly costs would go up almost 8 per cent.

In 1992 settlements and wage drift are expected to raise wage costs for all industrial employees by 5 per cent. Sick wage costs are offset by decreased payroll charges. [Diagram 5.1 to 5.9 Omitted] [Tabular Data 5.1 to 5.12 Omitted]
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Title Annotation:Sweden
Publication:The Swedish Economy
Date:Sep 22, 1991
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