Why? After all, Sweden has posted year after year of robust growth and productivity gains–making it the envy of Europe. The problem is jobs. To stay competitive, Swedish companies have shed workers by the thousands. By some estimates, more than 15 percent of Swedes are out of work, if you include the long-term unemployed and “perpetual students” who have chosen to stay off the job market. The dole is swelling. Borg’s answer: nudge people back to work by cutting taxes on low-paid jobs, cutting some unemployment benefits and reducing hiring costs for employers. As a sweetener, he says, the government will pump more money into schools and hospitals. Will the public support this trade-off? “That’s the 10,000-kronor question,” says Borg. Europe awaits the answer. Consider it the new Swedish model.
