The Swedish labour market

Last updated: 22 10 2021

About Sweden – an orientation about Swedish society.

This text is about the labour market in Sweden. The labour market is the sum of available jobs. The term “labour market” also includes you as the employee and the employers who hire people to work. 

An illustrated collage with a classroom, child carer holding children’s hands, and a care assistant in elderly care.

Working in Sweden may be different compared with the country or countries where you lived previously. This text explains how the labour market in Sweden works. It also describes gender equality in the labour market. 

  • The right to work

    Everyone is entitled to a job. This amounts to a right not to be excluded from the labour market. Where you are from, what gender you are or how old you are should not affect your chances of getting a job.

    There are several rights that are linked to work. You are entitled, for example, to fair working conditions, to equal pay for equal work and to join a trade union. You are also entitled to rest and time off work.

    It is also a right for parents to be able to combine family life with work. Children are entitled to protection from work that is harmful or hinders a child’s development and schooling.

The Swedish labour market has changed

Today, the number of women and men in the Swedish labour market is almost equal, but that has not always been the case. In the past, it was mostly men who had jobs, while women took care of the household. The type of jobs that people do has also changed. Jobs in agriculture and industry used to be very common, but now it is more common for people to work in shops or in marketing, for example. Some of the most common jobs in Sweden are assistant nurse, compulsory school teacher and shop assistant. Today, many jobs in the Swedish labour market require a qualification from a university or university college.

Working conditions and occupational safety have also changed. Around 150 years ago, it was the employers who decided most things in Swedish workplaces. Conditions for workers were bad. If a worker became ill or if the employer thought they were not performing well, they could be fired on the spot, without notice or warning. Today, the Swedish labour market is much more secure and safe. There are laws, collective agreements and trade unions that protect workers' rights.

Working in the public or private sector

The labour market can de divided into a private and a public sector. The public sector is owned by the state, the regions and municipalities. Activities and businesses in the public sector are run using the money we pay in taxes. Many jobs in the public sector are important in order for society to function – this includes jobs in medical care services, the justice system and education. People employed in the public sector might be medical care staff, teachers, child minders, police officers and firefighters. Government agencies such as Arbetsförmedlingen and the Migration Agency are part of the public sector.

Businesses in the private sector are owned by private individuals, not by the state. The main purpose of private businesses is to make money from their activity. Such private businesses come in a variety of forms. They might be small shops or other traders, restaurants, manufacturing industries, construction businesses or companies in legal, financial or transportation services. Around 70 per cent of all employees work in the private sector. Examples of corporations in the private sector in Sweden include Volvo, Ericsson and H&M.

The labour market can vary quite a lot between different parts of Sweden and between rural and urban areas. Many of the larger corporations, for example, are located in the major metropolitan areas.

Social enterprises

Social enterprises work to meet various challenges in society. They might be involved in promoting viable rural communities, improving integration or enabling everyone to get a job regardless of their age, gender, ethnicity or other factors. Profit is not the most important thing for a social enterprise. The profit that a social enterprise makes is usually invested back in the company.

Employers and employees

The labour market is divided into two sides: employers and employees. Employers employ and pay people for their work. An employee is such an employed person.

There are associations/organisations for both employees and employers. In these associations or organisations, employers or employees cooperate to promote their interests in the labour market. Every member of these associations or organisations has a voice and can influence decisions.

Employers' organisations represent the interests of employers.
The largest employers' organisations are:

  • Svenskt näringsliv (the Confederation of Swedish Enterprise), for private companies
  • Arbetsgivarverket (the Swedish Agency for Government Employers) and SKR (Sveriges Kommuner och Regioner, or the Swedish Association of Local Authorities and Regions) for public workplaces

Trade unions represent the interests of employees.
The biggest trade union organisations are:

  • LO (Landsorganisationen i Sverige, or the Swedish Trade Union Confederation)
  • TCO (Tjänstemännens centralorganisation, or the Swedish Confederation of Professional Employees)
  • SACO (Sveriges akademikers centralorganisation, or the Swedish Confederation of Professional Associations)

The national trade union organisations are made up of several smaller trade unions that represent different professions and industries.

Trade unions are often simply called unions. Unions work to improve employees' conditions at work – they negotiate their members' salaries with the employer, for example. There have been trade unions in Sweden since the 1880s.

The union can help you if you have problems at work – if you get the wrong salary or are forced to work more hours than your employment contract says, for example.

Collective agreements

A collective agreement is a written agreement between an employer and a trade union. A collective agreement contains rules about such matters as working hours, holidays and wages. Your wage is often governed by a collective agreement.

Collective agreements often contain rules about:

  • forms of employment
  • overtime
  • wages and remuneration
  • working hours
  • time off
  • termination
  • pensions and personal accident insurance.

A collective agreement sets how low the lowest wage will be for the employees. The agreement also applies to employees who are not in a union, but who work at a workplace that has a collective agreement. There is no law in Sweden about how low the lowest wage may be.

Even if your employer has a collective agreement, there is the potential to negotiate or discus your wage with your employer. You can obtain a different wage depending on how difficult your job is and how well you deal with your duties. The majority of large organisations and businesses have collective agreements with a trade union, but there are also employers who do not have a collective agreement.

The relationship between welfare, taxes and work

There are moments in everyone's life where we need help from the public services. We may become ill or have an accident. You may need an operation, or you may be pregnant and about to give birth. If you get a serious illness, the medical care you need will be expensive. If you lose your job, you may not have enough money to pay for food and rent. In Sweden, we have built a society and public services that ensure that you get help if you need it.

In Sweden, the state takes a great deal of responsibility for you as a resident of the country. You must have a basic income and be able to live well even if you are unemployed, ill, or not earning very much money. Countries that have chosen to pay for welfare with taxpayers' money are known as welfare states.

In an affluent society everyone has to help out. We can do so in different ways. One way is for all of us to help pay for things that everyone needs, which we do by paying tax. Everyone who lives in the country has to pay taxes to the state. Companies also pay taxes and charges to the state. Taxes in Sweden are high compared with many other countries because we have chosen to have the state pay for schools, medical care and many other things through taxes.

In Sweden, both men and women have to be able to support themselves through salaried work. Having a job gives you financial security, which is a prerequisite of an independent life. In Sweden, it may also be difficult for a family to manage on only one salary. With all adults who are able to work doing so and paying taxes to the state, we all contribute to creating an affluent society.

  • Questions to think about

    What is the alternative to welfare being financed with taxes?

    Do you know of any other systems for paying for welfare other than with taxes?

What happens if you don't pay tax?

Not paying taxes may amount to committing a crime known as tax evasion.

If you work without paying taxes, you get none of these advantages. You are also breaking the law, and risk being sentenced to up to two years in prison.

If you do not pay taxes when you work, you forfeit several rights that an ordinary job implies. If you work without paying taxes you risk the following:

  • You do not get an employment contract and can therefore be defrauded of your salary.
  • You will not receive unemployment insurance payments (a-kassa) if you become unemployed.
  • You will not receive any sickness compensation or holiday pay.
  • You will not receive any sickness benefit or parental allowance.
  • You will receive a lower pension.
  • You are not insured if you accidentally injure yourself or someone else or accidentally break or ruin something while working. If you have an accident at work, for example, you will not receive any compensation.

Discrimination is banned from workplaces

Working life has to be equal and offer equal opportunities to men and women. Discrimination is banned in working life, but despite this, it sometimes occurs.

What counts as discrimination can vary from case to case. Sometimes a court has to determine whether something constitutes discrimination. Here are two cases of discrimination in the workplace:

Example: Mariam lost her job because she was pregnant

Mariam had got a job as a driver for a taxi company. Shortly after that, she became pregnant. She informed her boss of this and was then told that she would not be allowed to work for the taxi company any longer. Mariam reported the event, and a court determined that she has been subjected to discrimination. It was wrong to fire Mariam because she was pregnant. The taxi company had to pay money in damages to Mariam because it had discriminated against her.

Example: Fatima wore a headscarf – was denied a job 

Fatima was offered a job at a temporary employment agency. But when the agency learned that she wore a headscarf, it no longer wanted to hire her. It claimed that her headscarf was a safety risk in the workplace.

Some workplaces may have requirements for what clothes you can wear in order to be safe at work or because the work done requires a certain type of hygiene. But that was not the case in the workplace where Fatima had been offered a job. A court therefore ruled that the company had discriminated against Fatima.

Employers' responsibility

All employers are responsible for ensuring that discrimination does not occur in their workplace. In other words, employers have to make sure that no-one is discriminated against on any of the seven discrimination grounds. You and everyone you work with have the same rights.

Employers have to ensure that discrimination does not occur in any of five areas:

  • Working conditions
  • Salaries and employment terms and conditions
  • Recruitment and promotion
  • Skills development and training
  • The possibility of combining work with parenthood

Most cases of discrimination in working life have to do with gender or age. Sometimes a person may be discriminated against on several discrimination grounds at the same time, such as if a person is both a woman and young.

Gender equality in the labour market

Women and men often work in different professions and in different industries in Sweden. There is a division in the labour market, with more women working in nursing and care, for example, and more men in the engineering and construction industry. There are also more men than women who start their own business or who are managers in a workplace.

Often women's work is not accorded same value as men's work. An example of this is that salaries are often lower in professions where mostly women work. Women who work in the same professions as men also tend to have lower salaries despite doing the same work as men.

Furthermore, working conditions and work environments are often worse in professions that employ lots of women. In such professions, the risk of being on sick leave due to mental and physical problems is greater than in professions that employ lots of men. For example, more women than men report that they have difficulties sleeping due to thoughts about their job, that they are subjected to threats and violence at work and that their work includes carrying out repetitive movements, which can cause injury. However, more men than women die in work-related accidents. This is partly due to the fact that more men than women work in industries where accidents often happen, such as the construction industry.

Research also shows that there are differences in men's and women's possibilities of combining work with family life. Women do most of the household work even if they work just as much outside the home as men do. More women than men take longer periods of parental leave.

In order to make Sweden more gender equal, the Riksdag has decided that Sweden must have a gender equality policy. One of its objectives is for women and men to have the same opportunities and conditions in working life. For example, both women and men have to be able to work in all professions. No-one should be hindered from doing a job by prejudices about what sort of work women and men are suited to. Everyone must be able to choose their profession on the basis of their aptitude, skills and interests.

Example: Anna’s new colleague gets paid more than her

Anna has been working at a petrol station for the past five years. One day a new colleague, Amir, is hired. When she finds out what Amir's monthly salary is, she is surprised. He earns SEK 1,000 more than Anna. They carry out the same work tasks, and he has less experience than her. Anna finds it unfair that she earns less than Amir.

Employers' obligations in ensuring a gender equal workplace

Every year, all employers have to review the salaries they pay their employees to check whether there are any differences between women's and men's salaries. This is a requirement under the Discrimination Act. If the review shows there are differences in pay between women and men for equivalent work, the salaries have to be changed to correct this.

Employers also have to promote an equal distribution of women and men in different types of work as well as in leading positions in the workplace. If the distribution between women and men among managers is uneven, for example, the employer should strive to change this, for example, by training employees so that more women or men are able to fill leading positions.