Carola Lemne: Optimist on behalf of Swedish businesses

"There is a structural problem with Sweden’s labour market,” underlines Director General Carola Lemne: 

“We have the highest starting salaries and the lowest number of low-skilled jobs in the OECD. There are three job seekers for each of these low-skilled jobs. Around half of those who have come here as immigrants only have a basic education or less.”

This is the problem in a nutshell, she thinks. It is too expensive to hire people or to buy simple services. It is worrying because it creates greater differences.

“The largest gap in society today is between people with jobs and people who don’t have jobs. It is not between low earners and high earners. This is an enormous challenge for the unemployed, their families and children.”

Carola Lemne wants a new system with a greater focus on entering the labour market through apprenticeships, and uses Germany as an example.

“Not exactly like Germany, each country must create their own system, but a way of entering the labour market where you make more money than from collecting unemployment benefit. This could be a permanent system, but the point is not for people to stay in this kind of jobs their whole life. It is in order to get in, learn the job and then move on.

“Let me put it this way: we need to cut employers’ costs; wages, employers’ tax, VAT and so on. Those who get these kinds of jobs and who are low earners would also benefit from lower taxes on low incomes. You reduce the cost of employing someone, while the employee is left with more.”

You might call this a labour market b-team?

“No, absolutely not. This is a start job. The idea is not at all for people to stay in these jobs, and people don’t stay.”

You don’t have Prime Minister Stefan Löfven’s support for this?

“Not so far, no.”

From health to business

Carola Lemne’s CV is long and impressive, and her background is somewhat unusual for the Director General of The Confederation of Swedish Enterprise. She has spent half of her working life in the health sector, been in and out of the public sector and now she has been tempted by enterprise.

“Yes. It is a bit unusual. People often end up working only in the private or the public sector.”

She is a medical doctor, has a medical Phd and worked in the public health sector before joining the international pharmaceutical industry, where she spent 14 years. Then she returned to the public health sector and became a hospital director before going back to the private health sector as CEO for Sweden’s biggest provider of private health and dental care, Praktikertjänst AB.

“It is different if politicians are calling the shots, or if a global business is doing it. It is different sides of society,” says Carola Lemne, and lays out her view of how society operates:

“If you think of what creates prosperity in a country, it is the fact that someone out there is prepared to buy our products, be it oil, steel, music or services. That is the starting point. The money which then come in, will be accessed by parts of the public sector through taxes, in order to create welfare, health services, infrastructure, all that. If you spend the money wisely, you have a positive spiral – you build a good education system, a good health care system, companies get good skills and healthy workers and can be more productive. You get a positive development. What creates debate is distributive politics. How do you divide up the money and what is fair.

“My dream is for everyone to realise that creating good businesses for people to work in will benefit the whole of the country. Afterwards we can argue about how we divide up the money. But the dream is that everyone agrees on what is needed in order to prepare people for the labour market, I would love to achieve that.”

Still, politics does not tempt her.

“Now, I am an old business leader and director general. I am too impatient to be a politician. I think. I want things done here and now. My father was a politician and member of parliament. So I have the interest for politics from an early age, but I don’t think it is for me.”

World-class welfare

Wage negotiations are around the corner. The counterpart, The Swedish Trade Union Confederation (LO), has not managed to come up with a joint strategy for its members this year. Negotiations will therefore be trade by trade. Employers’ organisations have agreed on a strategy but will also be negotiating trade by trade.

“The Confederation of Swedish Enterprise’s members agree that the ones setting the limit for how much we can take, to put it that way, are industries exposed to international competition. What we call the industrial agreement.”

She fears negotiations can become difficult because the opposition is split on that issue.

“Yes, it is worrying, actually, because I believe it increases the risk for difficult negotiations, especially if you know the reasons behind the split; some LO member unions have made it very clear that they “will have more”. So this is very worrying.

“Wages have been rising by two to three percent a year for the past six years. We have not had inflation, so no companies have been able to increase their prices, and we have not seen an increase in production either, so for companies things have only become more expensive. As a result, our international market share has fallen because our competitiveness has been falling six years in a row. If we carry on like this our companies will find it harder and harder to manage.”

Is this an issue which engages you?

“Look, Sweden’s competitiveness is of great concern to me. There are many different sides to this, but one of the key tasks facing The Confederation of Swedish Enterprise is to maintain our competitiveness.

“I usually say that if we want world-class welfare, which we do have in the Nordic countries, we also need world-class competitiveness, or it won’t work.”

The Nordic model needs to develop

Carola Lemne works closely with her Nordic colleagues, including through international forums like Business Europe.

“At Business Europe, like in the EU, you have more in common with certain members than with others, and if we look at our sister organisations I see that I very often cooperate with some of my Nordic colleagues. We often agree on many issues, and then it is important to find other friends to talk with. Quite often we feel we can be stronger when working with the UK, the Netherlands on certain issues, Germany sometimes. In my experience, small countries can enjoy surprising levels of influence if you work hard and participate in meetings and working groups.”

She feels the Nordic model is a good platform for cooperation, but that this needs to develop too.

“It is slightly different in the different countries, but much is the same. I like the basic idea that people closest to the grassroots, i.e. the employers and employees, are the ones who are best placed to agree on how things should be, and what we can cope with in terms of wage increases. This is much better than having politicians decide through legislation. I believe having respect for each other and developing together has proven a successful recipe.”

Is this system under threat?

“I don’t know about that, but we have to keep up with the times and develop. Much of Swedish legislation, and we do have some legislation for instance when it comes to employment rights, stem fromt the 70s. Quite a lot has happened since then. We do notice, and I know that trade unions also notice, that young people starting work are not particularly interested in the trade unions as they are today.

“LO is losing members fast, many young people are questioning the value of collective agreements, “why do we need them? Collective agreements feel very old fashioned” young people tell me. I think that if we, both employers and trade unions, are unable to modernise and find new forms of collective agreements that suit modern employees, and new types of companies, we will become irrelevant.”

Immigration for better or worse

The large number of refugees arriving in Sweden lately is also being discussed in the other Nordic countries. Many wonder how Sweden will be able to deal with so many refugees and immigrants. She does not take this issue lightly.

“I started working with this issue as soon as I came here. I think this is so important. We have been very open and clear about the fact that the business sector supports an open Sweden where people can feel welcome. We need people to come here and we need to be able to go abroad. If we had no immigration our workforce would be shrinking. My Norwegian, Danish and Finnish colleagues were a bit jealous of this up until about one and a half years ago. Because Sweden has been one of few European countries with a workforce which was not shrinking.  

“Then you get a problem when a huge number of people arrive at once. The main challenge for Sweden is that so many of those who have arrived now have little or no education, because we have very few jobs like that. So we need to change this, create new types of jobs. More simple jobs.”

So we’re not talking about more focus on education?

“You have to do that too, you have to do both. One in four of those who had arrived by last year had higher education, like doctors, dentists and nurses. Still it takes seven years before they find jobs. It is not right.”

People with higher education must be included in the labour market quicker, learn Swedish quicker and find workfast. Other groups need to be treated differently:

“Around 25 percent have further secondary education. They need to get an education which prepares them for jobs that do exist in the Swedish labour market.”

The challenge is that the remaining half have not even finished their basic education.

“Educating them takes a very long time. First they need to learn how to read, then they must learn Swedish, then they need to learn an occupation. By that time, ten years have passed and their average age is 38. This is not youths we’re taking about. They are outside of society, and they need to come in. First a job, then an education,” says Carola Lemne.

Does the current trend worry you?

“Yes, I worry if we cannot get people quickly off benefits and into jobs. That can lead to a society with wide gaps. Already in Sweden the big gaps exist between people who have jobs and people who don’t. The number of people without jobs has grown a lot. This leads to greater tensions, and we certainly don’t want that."

The government has initiated various measures?

“Yes, everything is needed. The way we see it, we need to create around 200,000 new jobs in the coming two to three years. Jobs which do not exist today. To succeed, we need to do everything at once. You need to both fast track those with an education, you need RUT and ROT in order to create a larger labour market [tax breaks for household services like cleaning, maintenance and renovation] and you need more simple jobs.

“You need to create jobs which do not yet exist in order to get people working, a kind of apprenticeship system. Doing all this simultaneously is difficult when you want to take one issue at a time, but this is the way it is – everything is needed.”

Do you feel the Löfven government is on the same track?

“Much more than they were a year ago. I think it is becoming apparent to everyone that if we carry on as before, we will not be able to solve this. We need to try new things.”

Development optimist

It is easy to worry about the future these days. Brexit, a non-functioning Schengen, a divided EU?

“Yes. A lot of people worry and I think that is also the reason behind the growth of extremist political parties. Immigrants and capitalism get the blame. But this depends on how you look at things.”

Carola Lemne is a realist and will not listen to myths and scaremongering. She likes to stick to facts:

“There is a very famous doctor in Sweden called Hans Rosling. He is incredibly good at describing the world. The fact is we have never had it better. Yes, we are facing a major refugee catastrophe, but look at the world as a whole: We live longer, we are lifting more people out of poverty than ever before, we have actually never had so little war. So I guess I am a development optimist, not out of ignorance, because if you look at history this is a very positive time in which to be alive.

“I think we are living through major changes. The digitalisation which is happening influences everything. It has an impact on your job, on my job. Suddenly a small company can be sold to a far away country. Some jobs disappear, some trades disappear. You have turbulent times before the old disappears and the new replaces it. You worry about what will happen to you when your job is gone. What is going to happen, there are so many new and strange things. I believe we are in a period right now when society is transforming. It usually turns out OK.”

What is it with your job that gives you the most joy?

“It is all the companies we meet. I travel a lot and meet our members. All these enthusiasts are going at it, and that is what gives me the most joy. This goes for big and small companies, be it a small flower shop or some of these major global companies – they are going at it. That is absolutely the most enjoyable thing, that power and energy which they exude.”

Will you stay in this job? 

“I do hope so, but that is up to the board.”