Apparently in Sweden we have a unemployment rate around 7.8% What would happen if that would go down to say 1% or 0% ?
The law of supply and demand applies to workers as well as goods. With high unemployment workers compete with each other for jobs driving wages lower; with low unemployment employers have to compete with each other for employees driving wages higher. Economists see employment and inflation as correlated. Periods with low unemployment generally have high inflation due to higher wages causing the price of goods to go up as well. The inverse is not always true. In the 1970's the US experienced "stagflation" where we experienced both high inflation and high unemployment.
Sweden has a very solid social security system. So I think not much would change for the people. Your government would be able to reduce the taxes by one or two percent, maybe.
And then, your companies would start complaining that they can't find any qualified personnell. They would probably request that the government gives out green cards and encourages immigration of qualified people.
And then, the countless qualified, unemployed young people in all the other European countries would start to learn Swedish and invade.
True, but since Sweden is a member of the European Union, and people from EU-states can go to work in other EU-states without needing a visum, unemployment rates would have to go down all over the EU first. And even when everyone in the EU has a job, companies would probably still try to get immigration from non-EU countries via green cards before significantly rising the wages.
It's good for any country the day everyone in it finds a job.
It's good for any country the day everyone in it finds a job.
would it be good or bad for sweden if this happens?
