The Labor Market and Personal Finances

The labor market can be divided into the public and private sectors. The public sector consists of activities that the state, the regions, and the kommuner are responsible for and which are funded by taxes — for example, the work done by health care staff, teachers, childcare workers, police officers, and firefighters. About 30 percent of everyone who works in Sweden works there. The private sector consists of all privately owned companies, everything from shops, restaurants, and factories to construction companies and firms working in law, finance, and transport — around 70 percent of the workforce is employed in the private sector. The labor market looks different across the country: in large cities there are many companies within services and trade, while smaller towns and localities often have industry such as steelworks, paper mills, or factories located near necessary natural resources.

The labor market has employers, who hire and pay wages, and employees. Both parties have organized themselves into their own organizations to look after their interests. Employer organizations represent the employers — the largest are Svenskt Näringsliv (the Confederation of Swedish Enterprise, for private companies) as well as Arbetsgivarverket (the Swedish Agency for Government Employers) and SKR, Sveriges Kommuner och Regioner (the Swedish Association of Local Authorities and Regions, for public workplaces). Trade union organizations represent the employees, and the largest central organizations are Landsorganisationen i Sverige (the Swedish Trade Union Confederation, LO), Tjänstemännens centralorganisation (TCO), and Sveriges akademikers centralorganisation (SACO). Trade unions negotiate wages with employers and can help if a member has problems at work. Trade unions and employer organizations negotiate and sign so-called kollektivavtal (collective agreements) on wages and working conditions, which apply to all employees at the workplaces covered by the agreement. In Sweden, wages are thus set through negotiations between the labor market parties, not by the state.

There are laws in the labor market to protect employees' rights and create a safe working environment, for example laws on working hours, the work environment, and vacation. Employers must also pay contributions to the state for their employees' pensions and health insurance. Everyone who works pays tax on their wages, and how much depends on income — it is illegal to work without paying tax. Unemployment insurance makes it possible for an unemployed person to have an income. Arbetslöshetskassan (the a-kassa, unemployment fund) is an economic association that pays money to unemployed members; to receive benefits, a person must have worked enough hours during a set period and be actively seeking work. Benefits from the a-kassa are funded both by the state and by members' membership fees.

Personal finances (privatekonomi) concern people's private income and expenses. Income can be wages or benefits, and expenses are costs for things like housing, food, and clothes. Wages in Sweden are fairly high compared with many other countries, and how much a person earns depends on occupation, education, experience, and industry. The state also provides money through social insurance schemes such as pensions, sickness benefit, and child allowance. People can save money in bank accounts, funds, or shares, and many take out loans from the bank to buy a home or a car. In recent decades, housing prices in many parts of Sweden have risen sharply, so mortgages are often a large part of personal finances. It is also common to buy things on credit, for example with a credit card, but the interest on such loans is often high. Kronofogdemyndigheten (the Swedish Enforcement Authority) is a government agency that ensures debts are paid, and can also help people with large debts get their finances in order — this is called debt restructuring (skuldsanering).