The future of work is central in new Nordic cooperation programme

The grand government’s representative residence in Parkveien was the venue when Anniken Hauglie recently welcomed government ministers and civil servants from across the Nordic region for the final ministers’ conference in Oslo. The labour market’s parties and researchers were also invited to contribute with ideas for different policy areas. 

“We are facing major changes to the labour market. The Nordic cooperation can help increase our understanding and provide inspiration for national policy development through the exchange of experiences and knowledge,” Anniken Hauglie said.

The new cooperation programme for the labour market sector for the years 2018 to 2021, which was adopted at the ministers’ meeting, provides the overarching strategy for cooperation going forward. It covers the labour market, working environments and labour law.

Increased digitalisation, automation, the sharing economy and the consequences all this can bring to working environments and jobs security, has been given a more prominent place in the new cooperation programme. So has the focus on the integration into working life of refugees and people with disabilities.

“It will be important to highlight such issues in a Nordic context in the coming years,” said Anniken Hauglie, and got the approval of the rest of the government ministers for the cooperation programme 2018 – 2021.

Dagfinn Høybråten, Secretary General of the Nordic Council of Ministers, who chaired the ministers’ meeting together with the Presidency, informed about the positive reception the programme had in the Nordic Council of Ministers. He also said that the sharing economy and the future of work has impacted many policy areas in the Nordic cooperation: The business sector has initiated the project ‘Growth through the sharing economy’, the financial sector has held a seminar for Nordic tax exports, the environmental sector is focussing on how the sharing economy changes consumer habits and the impact on environment.

A Nordic-Baltic ministers’ meeting about the Digital North was held in April, and recently a Nordic council of ministers for digitalisation for the period 2017 to 2020 has been established. One of its remits will be to monitor technological developments and secure a high level, and maintain the protection of working environments and workers’ rights. The Nordic labour ministers have launched a comprehensive research project led by the Norwegian research foundation FAFO, about how the Nordic labour market might look in 2030.

Working life an arena for integration

Integration has been a central theme for Nordic cooperation in the wake of the refugee crisis. This year a major Nordic research programme run by NordForsk worth some 50 million Danish kroner (€6.7m) was established. Funding will be available from 2018.

When it comes to working life, the Norwegian Presidency has focused on the theme of migration and integration and the link to work participation. The Norwegian Presidency conference held in Oslo on 13 June 2017 was part of this.

Professor Grete Brochmann delivered the opening address there. She led two public commissions that presented reports which mapped the impact of immigration on Norwegian welfare and economy; NOU 2011: 7 ‘Migration and welfare – the future of the Norwegian model’ and NOU 2017: 2 ‘Integration and trust. Long-term consequences of high immigration’.

The mandate for the last commission highlighted sustainability, precisely aimed measures and trust. The integration and trust commission, as it was called, was asked to assess the socio-economic consequences of different types of immigration.

Minister of Labour and Social Affairs Anniken Hauglie had also invited Professor Grete Brochmann to introduce a discussion at the Nordic labour ministers’ meeting on migration and integration with focus on the labour market, where both the Nordic ministers and the labour market’s parties were present.

“The reports are first and foremost about Norway, but all of the Nordic labour and welfare models are facing similar problems,” said Grete Brochmann.

“The 2015 refugee crisis put the Norwegian immigration system under acute pressure. The number of refugees was higher than ever before – a situation we believed might prevail. Per capita, Norway was one of Europe’s largest recipients with more than 31,000 asylum seekers. Among the Nordics, Sweden towers above all the other countries when it comes to the number of arrivals, but all of the countries except Iceland were very much affected.

“The reports conclude that immigration represent an opportunity for the Norwegian welfare society by adding competencies and labour from outside which is in short supply domestically. It also brings new thinking and strengthens flexibility in the labour market,” Grete Brochmann said.

“But this is dependent on new citizens being integrated and that they participate in the labour market in line with the majority population as much as possible. 

“It is also important to mention that the weakest groups in the labour market today are the ones that Norway and the rest of the world must welcome for different reasons than economic ones.”

Challenging salary structure

The Nordic welfare models depend on high levels of employment and a relatively narrow salary structure in order to maintain today’s welfare system. In Norway, like in the rest of the Nordic region, wage levels in some non-skilled jobs are relatively high. This calls for a high level of productivity. A compacted salary structure makes it particularly challenging to include people with low skills levels.

“This kind of labour is therefore more likely to become dependent on state support. This is both a result of the nature of the Norwegian social model and a challenge for its future. Especially if there is an increase in the proportion of people with low qualifications,” said Grete Brochmann.

Integration strategies

Grete Brochmann pointed to several strategies for achieving the best possible integration into working life. The link between education, qualification and vocational training has been central to the commission’s analysis. 

“The commission has focussed on strengthening the link between education and work, skills development and basic qualifications in order to help refugees succeed better in the Norwegian labour market.

“It turns out the Norwegian labour market does not value refugees’ education from their home countries all that much. On the other hand, employment levels among refugees who have been educated in Norway are nearly as high as for the native population.”

The commission identified major social rewards linked to building on foreign educations with some Norwegian education – compared with starting from scratch. Or alternatively, having a tenuous link to the labour market as a non-skilled worker. The reward will be greater the more efficient the qualification pathway is, and the quicker you remove obstacles to people’s participation in the normal education system.

“Educations that combine training and work should be used to a greater degree,” she recommended.

“You also need to prepare alternative models and evaluate these. It is very surprising how little is known about this field, where billions of kroner is being invested.

“It is also necessary to help employers hire people with lower qualifications and uncertain levels of productivity. Authorities should consider increasing the use of wage subsidy schemes and occupational rehabilitation.

“Programmes that combine training, vocational education and work should be developed and used to a greater degree,” said Grete Brochmann, and warned against low-wage competition which lowers the threshold and reduces yield. Work must pay, the Norwegian model depends on this.

“A high employment level and high minimum wages are prerequisites for high benefit levels, which is a characteristic of the Norwegian model,” said Grete Brochmann.

Highest number of refugees in Sweden

The Nordic countries are similar in many ways. But there are differences too. Sweden has welcomed the most refugees, and has done a lot to include the newly arrived into society. 23 percent of the population is born abroad. Although employment rates are rising, there are differences in the rates between domestic born and foreign born. The gap is five percent for men and ten percent for women.

One risk identified by the Swedish Minister for Employment and Integration Ylva Johansson, is social segregation when many refugees and immigrants gather in deprived parts of a city. To prevent this from happening, new legislation makes sure all of Sweden’s municipalities must welcome refugees.

The education system is key

From 1 January 2018 in Sweden, newly arrived people with lower educations will have a duty to study. There will be changes to vocational training in upper secondary education, with the introduction of a vocational package. This should be enough to get a job, but not a complete education – this can be added later.

Sweden has introduced a fast-track system together with the social partners, aimed at people with vocational educations. There is also strong emphasis on skills evaluation and special measures where needed.

The government has also entered into an agreement with the labour market’s parties for how to hire people with lower educations, and letting them grow into the job, explained the Minister for Employment and Integration Ylva Johansson.

Representatives for the social partners, with Chief Economist Roger Bjørnstad from the Norwegian Confederation of Trade Unions (LO) and Head of the Department of Labour Market at the Confederation of Norwegian (NHO) Enterprise Kristina Jullum Hagen, were active in the debate.

Skills, skills, skills

“One of the basic traits of the Nordic model is small differences. For the LO it is crucial that integration policies focus massively on skills improvement in order to meet this challenge,” said Roy Bjørnstad from Norwegian LO, and added: 

“LO wants to push fast-tracking into working life through the early mapping of skills, increased use of education and work-related measures in the introduction programmes, and especially the use of Norwegian language training and skills-improving measures in parallel with internships. Wage subsidies can be a good thing, but they must be followed closely with skills-improving measures. We hope Norwegian authorities will contribute even more actively to the skills pathway going forward,” said Roy Bjørnstad form LO.

“On a socio-economic scale, we are worried about the falling employment rate that we can see in Norway, and what it will mean for the Norwegian economy in the long run if we fail to maintain high employment rates also among immigrants,” added Kristina Jullum Hagen from NHO.

“The other way to look at this issue, is the need for labour which we hear about from our members, who struggle to fill positions. It should be possible to utilise the labour that arrives in Norway in a better way, and to create a win-win situation for those who come here and for the businesses that need labour, especially skilled labour,” said Kristina Jullum Hagen, and highlighted what Grete Brochmann had said in her introduction – that it is important to combine work and education in a better way than what is the case today.

“In Norway we have the two year introduction programme. There are now 27,000 participants on that programme. This is more than ever before. It is what we do now that will determine whether the people who are here get a successful transition into working life,” said Kristina Jullum Hagen.

A need for more knowledge

“It is surprising how little is known about this field, where billions of kroner is being invested,” said Professor Grete Brochmann in her address. The Nordic Council of Ministers wants to do something about this. The Ministers of Labour therefor asked the Secretary General to initiate the coordination of a Nordic knowledge base for what kinds of measures work in terms of integrating immigrants into the labour market, without overlapping existing knowledge, including that from the OECD.