AT THE height of the migrant crisis the Sweden Democrats, a populist anti-immigrant party, released a video. Over images of burnt-out cars and groups of homeless people it read: “No money. No jobs. No homes. No welfare. Welcome to Sweden.” The message, like a previous video from the party in which burqa-clad women race ahead of an old Swedish lady to grab a share of public funds, was hysterical. But it touched on a real problem: large-scale immigration is putting a strain on Sweden’s welfare system.
Sweden has long been admired for its blend of prosperity and social cohesion. Its model combines high taxes, generous welfare, collective bargaining, high educational standards and a reasonably free-market economy. The result is high living standards: the lowest wages, for example in hotels or restaurants, are far higher than minimum wages elsewhere in Europe says Marten Blix, a Swedish economist. Relative to other countries that have comparable data, Swedish men in manufacturing earn the highest minimum wage.
Aspects of this welfare state have long seemed unsustainable, with an ageing workforce and a recent rise in the number of sick-leave absences taken by employees. Some changes were made in the 1990s: the pension system is far less generous than it used to be, and much more school choice was introduced. But the influx of hundreds of thousands of…Continue reading