Why Sweden Has Riots | Cato Institute

Johan Norberg explains why Sweden, with the lowest poverty rate (1.2%) in Europe, still experiences riots amongst disaffected, largely immigrant youth in parts of Stockholm:

……there is serious inequality in Sweden, but the divide is not so much between the rich and the poor as between those with jobs and those without. And frequently this is an ethnic divide. As the author Fredrik Segerfeldt points out in a new study, Sweden has the largest employment gap between natives and foreign-born of all the rich countries where data is available. Only 6.4 per cent of native Swedes are unemployed, but almost 16 per cent of the immigrants are…….. In Husby, where the riots started, 38 per cent of those under 26 neither study nor work.

So what’s to blame? The aspect of the Swedish social model that the government has not dared to touch: strong employment protection. By law, the last person to be hired must be the first person to be sacked. And if you employ someone longer than six months, the contract is automatically made permanent. A system intended to protect the workers has condemned the young to a succession of short-term contracts. Sweden’s high de facto minimum wage — around 70 per cent of the average wage — renders unemployed those whose skills are worth less than that. Sweden has the fewest low-wage, entry-level jobs in Europe. Just 2.5 per cent of Swedish jobs are on this level, compared to a European average of 17 per cent.

This highlights the paradox of strong labor laws intended to protect employment. They discourage permanent employment and create a two-tier society: those with permanent jobs and “permanent” casual-workers. High minimum wages, again do not guarantee that those with low skill-levels earn a decent wage. It guarantees that they will be unemployed and dependent on social welfare. Australia should take note.
Read more at Why Sweden Has Riots | Cato Institute.