In a world full of anxiety about the loss of jobs to automation, Sweden has positioned itself to embrace the new technology without threatening its workers.
Sweden’s famous social welfare system makes this a place where few people are fretting about automation — or much else, for that matter. Even blue-collar workers embrace the shifts as robots transform their industry, testing self-driving vehicles that are replacing truck drivers. They have faith in the Swedish economic model to protect them against the wave of joblessness experienced elsewhere, and simply re-train those workers to run the machines — or perhaps move into a new line of work that interests them, entirely supported by generous federal funding.
“I’m not really worried,” one Swedish miner says. “There are so many jobs in this mine that even if this job disappears, they will have another one. The company will take care of us.”
In much of the world, people are increasingly nervous about the present and coming waves of unemployment from automation. As the usual tale goes, globalization compelled people in wealthier regions like North America and Europe to compete against cheaper laborers in Asia and Latin America, triggering joblessness. Now, the robots are coming to finish off the humans.
But such fears have little purchase in Sweden and its Scandinavian neighbors, where unions are powerful, government support is abundant, and trust between employers and employees runs deep. Here, robots are just another way to make companies more efficient or enhance worker safety. As employers prosper, workers have consistently gained a proportionate chunk of the benefits— a glaring contrast to the United States and Britain, where wages have stagnated even as corporate profits have skyrocketed.
“In Sweden, if you ask a union leader, ‘Are you afraid of new technology?’ they will answer, ‘No, I’m afraid of old technology,’” says the Swedish minister for employment and integration, Ylva Johansson. “The jobs disappear, and then we train people for new jobs. We won’t protect jobs. But we will protect workers.”
Americans often dismiss Nordic countries as the land of nanny-state socialists in contrast to the red-blooded capitalists who rule Silicon Valley. But Sweden embodies a possibility that, in an age of automation, innovation might actually be advanced by providing a generous cushions against failure.
“A good safety net is good for entrepreneurship,” says Carl Melin, policy director at Futurion, a major research institution in Stockholm. “If a project doesn’t succeed, you don’t have to go broke.”
In the U.S., for example, most people depend on employers for health insurance. That means losing a job can be financially ruinous. It makes workers hesitant about leaving their present job to seek a potentially more lucrative careers. And it makes unions inclined to protect jobs above all else.
In contrast, Sweden and other Scandinavian countries provide health care as well as free education. They pay generous unemployment benefits, and it’s often up to employers to finance extensive job training programs. This means that unions can embrace automation as a way to provide competitive advantages that make jobs more secure.
Transforming the United States along the lines of Scandinavia would entail costs that fly in the face of the tax-cutting fervor that’s swept American politics in recent decades.
Sweden, Denmark and Finland spend over 27% of their annual economic output on government services that support jobless people and other vulnerable groups, according to data from the Organization for Economic Cooperation and Development. In the United States, we invest less than 20% of our economy to such programs.
Read the rest of this feature story in the New York Times Business Section.