Think Tank Calls for Increased Investment to Tackle Swedish Unemployment
Katalys urges Sweden to boost public investment to reduce unemployment and economic inequality.
Key Points
- • Sweden's unemployment rate is currently around 8.5%.
- • Katalys calls for raising the public sector gross debt limit from 35% to 45% of GDP.
- • The government seeks to shift from a surplus goal to a balance goal to allow more borrowing.
- • Five trade unions support Katalys's proposals for welfare and labor market reforms.
A new report by the think tank Katalys urges Sweden to significantly enhance public investment to combat rising unemployment and economic inequality. Director Daniel Suhonen criticizes both social democratic and conservative governments for failing to prioritize investments over the past three decades, leading to alarming levels of unemployment currently standing at roughly 8.5%. Suhonen states, "Investing is the pressure in the economy. With too low investments, society is like a bouncy castle with a slow leak, where children hit the ground." He advocates for a paradigm shift towards full employment policies, which have been overshadowed by a neoliberal focus on inflation and market solutions.
According to the report, necessary public investments should encompass critical infrastructure projects including railways, housing, healthcare, and climate initiatives, all potentially financed through increased borrowing. The government's recent adjustment of its fiscal goals—from maintaining a surplus to balancing the budget—could facilitate this investment surge. Suhonen proposes raising the public sector gross debt limit from 35% to 45% of GDP to support these efforts.
Katalys aims to halve the current unemployment rate by the end of the next parliamentary term and is rallied by five trade unions advocating for reforms across welfare and labor policies. Suhonen warns that if these measures are not adopted, Sweden risks enduring another decade of high unemployment, which he deems socially catastrophic.