Sweden Inc. sounds alarm as election signals jobs clampdown on immigrants

August 2, 2018

(This Aug. 1 story has been refiled to clarify that data reference in paragraph 19 is to real wages)

By Esha Vaish, Johan Sennero and Johan Ahlander

STOCKHOLM (Reuters) – Uncertainty surrounds next month’s Swedish election but one thing about its outcome seems clear: immigrants will find it harder to get jobs and the consequences will rebound on local businesses too.

A shortage of qualified graduates and an aging population are squeezing the supply of Swedish labor, leaving technology blue chips and blue-collar employers especially in need of more foreign workers.

But the rise of the nationalist Sweden Democrats, who propose ending all job-creation subsidies for foreigners, has spooked other major parties into drafting immigrant labor clampdown measures of their own before the Sept. 9 ballot.

After introducing curbs on asylum seekers, the governing center-left Social Democrats – polling just ahead of the nationalists on around 24 percent of votes – proposed barring firms in sectors not classified as short of staff from offering work to non-EU nationals.

Unions welcomed the proposal but it stunned many businesses which, worried that shortages of engineers, truck drivers and mechanics will only increase as a jobless rate of 6.3 percent trends lower, say it would add more red tape to an already unwieldy system.

“Short term, we are absolutely dependent on immigrants to be able to expand,” said Robert Sobocki, CEO of truckmaker Scania’s Swedish retail business which has had to turn down work due to a lack of mechanics.

One of its recent hires is Muhsen Mousa, 42, a mechanic who fled Syria for Sweden in 2015 and typical of the kind of immigrant who politicians are increasingly looking to turn away.

“Sometimes I get worried a little bit,” Mousa said through an translator. “But then I think to myself … if I work and I support myself no one will do any harm to me.”

Mousa, who repairs engines and gears at the company’s workshop outside Stockholm, is far from alone. About 35-40 percent of the Scania Bilar Sverige mechanics in Sweden’s three biggest cities are foreign.

LABOR DEFICIT

In sectors of shortage also including education and health care, foreigners accounted for about 90 percent of jobs growth last year, according to the Swedish Public Employment Service.

IT and telecoms face a deficit of 70,000 staff by 2022 if measures including immigration are not promoted, the sector’s employer association estimates.

That would impact the local arms of tech firms including Spotify and Tieto, but also heavily IT-dependent companies such as consultants PWC https://ift.tt/2LFla7n and retailer H&M https://ift.tt/2vsqyzx.

Elsewhere in the engineering sector, consultancy group Sweco wants to hire 2,000-3,000 engineers and architects every year, which also requires access to workers from abroad.

“We are depending on it,” CEO Asa Bergman told Reuters.

While the pre-election proposals of the Social Democrats and Sweden Democrats are primarily intended to make it tougher for refugees and unskilled workers to settle in Sweden, businesses say the measures would also mean more hurdles for skilled immigrants.

Employment Minister Ylva Johansson argues Sweden needs to tighten labor immigration laws that have so far been the most generous in OECD countries, as some firms have bent rules to hire cheaper labor rather than plug shortages.

“(Immigration) is needed in many professions, and for those professions it should be easy, but …we must put a stop to it in the professions where there is no labor shortage,” the Social Democrat told Reuters.

Peter Karlsson, labor market expert at employers organization Swedish Enterprise, said companies were simply looking for the right staff who were not necessarily available in the local market.

However, from January 2016 to June 2018, average annual real wage increases fell to 0.7 percent from 1.7 percent between 2000 and 2015, according to Nordea analyst Torbjorn Isaksson.

DEPORTATION RISK

Even where shortages are acknowledged, the rightward shift in political rhetoric – which has also seen a hardline anti-immigration faction emerge in the center-right Moderate party, polling third on around 20 percent – has already made life tougher for foreign employees, companies say.

The time it takes non-Swedes to be hired has jumped as new job requirements – including degree checks, certifications and language courses – have been phased in.

Minor paperwork errors have even led to foreign staff being deported, prompting calls for change from 32 large firms including telecoms group Ericsson and bank SEB in an open letter to the government in February.

“We feel this is threatening Sweden’s competitiveness,” said engineering company ABB Sweden’s CEO Johan Soderstrom.

Employment Minister Johansson acknowledges the problem, which procedural changes at the migration agency had so far failed to address.

“When people are extradited for rather trivial mistakes the employer made, it gives a bad image of Sweden and the Swedish labor market,” she said.

ABB Sweden’s latest deportee, 38-year-old Iranian sales engineer Ali Omumi, has a last-ditch appeal pending against that ruling.

If that fails, “I will lose Sweden, and Sweden will lose, at least, a taxpayer,” he said.

(Reporting by Esha Vaish, Johan Sennero and Johan Ahlander in Stockholm, additional reporting by Olof Swahnberg)

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August 02, 2018 at 04:21PM
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