Unemployment is increasing – they are the first to be affected

– It is in the private service sector that many people get their first job and it is the one who is at risk, says Emil Persson, labor market analyst.

The service sector has functioned as an integration engine in recent years, stated the employer and trade association Almega in a report earlier this year.

Among men in particularly vulnerable areas, the percentage of employed increased from 57 to 66 percent in 2014–2021, and the most common occupations are in transport and storage, restaurants, cleaning and service.

Among women, employment in these areas has increased from 47 to 56 percent during the same period. The jobs that dominate are in cleaning and service, care and welfare and preschool.

Risk of it breaking

Is there a risk that the positive development will break and roll back now?

– There is a risk that it will do so, in part, says Emil Persson.

Looking at the whole country, it may not look so dramatic: Unemployment is expected to increase from 6.4 percent (333,000 people) this year to 6.6 percent (354,000 people) next year.

But in the metropolitan regions it gets worse and the jobs that are most risky are precisely in the private service sector.

– Most often, it is those who have a slightly looser anchorage in the labor market who are allowed to leave the earliest. These are the groups that have recently entered the labor market, says Emil Persson.

The interest rate hits hard

The high housing prices in the three metropolitan areas mean that the increased housing interest has the greatest consequences there.

– On top of that, necessary goods such as food and the like have become more expensive. Then you draw in non-necessary consumption.

– Trade, transport, hotels and restaurants – these are industries that are all affected by the declining consumption in society. There is also a relatively high proportion of people born abroad and people with a shorter education, i.e. the same people who live in these areas, says Emil Persson.

How the job development will be in the public sector, where relatively many women from vulnerable areas work, is more uncertain. Municipalities and regions are also under heavy pressure, which Emil Persson sees as a cloud of worry.

Tougher for newcomers

In it report on the labor market outlook that Arbetsförmedlingen recently presented, it is stated that the weak development in the number of hours worked in the public sector in 2023 is expected to continue next year as well. Therefore, it is believed that the level of employment in the sector will not be able to increase more than marginally, even though the needs are great.

For those who are completely new to Sweden, it will be significantly more difficult to gain a foothold in the Swedish labor market in the coming years.

– We are in a recession and have had a shrinking GDP for two quarters in a row. It is a more difficult situation on the labor market for everyone, says Emil Persson.

The expert’s job seeker tips

His best advice to anyone who loses their job is to broaden their search area – both industry-wise and geographically. In addition, it is always a good tip to educate yourself. He also emphasizes that the situation is far from pitch black and not comparable to the financial crisis or the pandemic. As early as 2025, the economy is expected to begin to recover. And there are still jobs to be applied for:

– The number of jobs in our job bank has decreased very clearly during the autumn, but there are still jobs to apply for. There is a need. It’s not as big as it was a year ago, but it’s still there.