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An end to job security in the Swedish public sector

Wednesday, December 12, 2012 – Quebecers still pay the highest taxes in North America, but do they at least get their money’s worth?

“There is plenty of room for improvement in making the government more efficient, especially by reforming work organization,” answers Yanick Labrie, author of a new publication from the Montreal Economic Institute (MEI). He points out that Sweden’s public sector employment scheme has undergone something of a revolution. Gone are job security and seniority, and certain powers have been devolved to local authorities. Quebec could certainly take a page from Sweden’s playbook in order to provide better services to its population.

In Sweden, 90% of public employees are now remunerated individually according to performance and merit. Remuneration can also vary from one region to another. Indeed, salaries tend to be higher where there are shortages, like in the Stockholm region where pediatric nurses earn 13% more than in the Jönköping region.

In addition to resolving certain chronic problems like the shortage of nurses, these reforms contributed to Sweden’s ranking as one of the least corrupt countries in the world. “Swedish researchers confirm that guaranteed lifetime employment is not a bulwark against corruption, contrary to what Quebec union leaders would have us believe. It is rather the meritocratic aspect of an employment scheme, much more prominent in Sweden than in Quebec, that is most likely to have an influence. There exist strict rules regarding hiring and promotions that keep the civil service sheltered from political interference,” explains Mr. Labrie.

The benefits that employees were able to secure in terms of salaries and professional autonomy from differentiated performance pay were such that unions had no choice but to recognize them. Interestingly, the transition toward more flexible work organization was accomplished without provoking a social crisis, and very few players, be they unions, workers or government representatives, long for a return to the former system.

“People in Quebec who say they admire the ‘Swedish model’ should take note of the important reforms that have been put in place over the past two decades in that country. In short, they should take inspiration from today’s Swedish model and not from an outdated vision of what it might have been in the 1970s,” adds Michel Kelly-Gagnon, president and CEO of the MEI.

The Economic Note entitled Work Organization in the Public Sector: The Swedish Example was prepared by Yanick Labrie, economist at the MEI. It can be consulted free of charge on our website.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its publications and conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms.

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Interview requests: Ariane Gauthier, communications coordinator, Montreal Economic Institute / Tel.: 514 273-0969 ext. 2231 / Cell: 514 603-8746 / E-mail: agauthier@iedm.org

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