Lönedag- Payday in Sweden!

Today is the 25th. Before Sunday, the day of rest, and Saturday, the day of Sabbath, the 25th in Sweden is the most important day. It is payday for the month for everyone across Sweden. You get paid on the 25th or no day.

Because this payday occurs on a Friday, you can be sure across Sweden that people will be partying and bar hopping a little extra harder. And shopping more this weekend. Lots of spending.

The splurging over the payday weekend, lönehelg, always made me wonder about the household savings rate in Sweden. Turns out it isn’t so bad, around 12% household net savings in Sweden. In comparison, savings in Japan dropped from double digits in the 1980s-2000 (not shown) to just 3.78% the past year. Surprisingly, American households hold a positive net savings, even if just barely. And well, the Brits really need a class or two on savings and income.

What does this mean for us in Sweden? Not much except that in the cities people do like to spend money, some are so poor at financing they barely make it month to month. And with the Swedish government enjoying our hard earned tax salary, save an extra krona or two. Besides, we can make fun of the Norwegians with their negative savings.

Household savings from the major OCED countries (United States, United Kingdom, Japan, Germany, France, Norway, Sweden)

But for all of you who don’t have a job and a lovely paycheck to look forward to, don’t fret. The unemployment rate for young people (under 25) is 25% in Sweden, one of the highest of the developed world. The only countries with higher unemployment are Arab nations, (p)IGS, and extreme poverty nations.

Guesses to why Sweden has such high unemployment stems from: 1) lack of interest by young people to find jobs; 2) inability to find jobs because employers do not want inexperienced people; 3) the skills possessed by new generation is not enough to be competitive in the work force.

As a +25 oldie, I’ll be doing the right thing in Sweden by celebrating my lönehelg at the Stureplan bars.

11 thoughts on “Lönedag- Payday in Sweden!”

  1. When it comes to youth unemployment there is also LAS (The Employment security law) which gives Sweden one of the most unflexible labour markets in the OECD. It basically means that you cant fire people based on their incompetence, instead you have to follow LIFO (Last In First Out), meaning that “older people” who have worked at a place for say 15+ years are pretty hard to get rid of unless you give them a nice ca$$$h bonus to quit.

  2. That’s true, but there’s also several tax benefits for Swedish companies to hire people under 26. At the same time a person who leaves their company in the 50s (voluntary or not) have a low percentage of obtaining a new job compared to young blood- cheaper, smarter, faster.

    I worked at a company that practiced LIFO and flat out “payout” settlements to eliminate employees, age didn’t really matter. It was more, get people the fuck out.

  3. There’s also the issue that a lot of students don’t fully graduate from university until their late 20s. Does this take into account part-time jobs? The numbers don’t really tell the whole story.

    I’d also add an unwillingness to move for a job as a factor. Uppsala has a highly educated population but a high unemployment rate, for example — but no one wants to leave.

    And Swedish ageism drives me crazy. It’s sooo important to know what your age is, so you can be stereotyped accordingly. Very frustrating if you’re ready to get going at work at an earlier age.

  4. Wow, learn something new everyday! I don’t have a Swedish job, and I guess my Swedes job is weird, as he gets paid on the 27th. I’ve never heard of lönehelg – maybe I don’t know enough working Swedes (about half I know don’t have a job), maybe we don’t party as much in Norrland at the pubs. Who knows. But very interesting to know how it works in the rest of the country.

    Yeah, I see why unemployment is so high. When you go to the Arbetsförmedlingen you need to look for a job all across the country. And lots of people aren’t willing to move. At the same time, for many it is better to live off of unemployment money instead of getting a job at Max or another low paying job. I know quite a few that are waiting around for a better job instead of taking any job… When the state helps you out, you can afford to wait.

    Hope you enjoyed your lönehelg!

  5. @Missfoster – I’ve always wondered, what is the minimum wage in Sweden? It certainly should pay better than living off of unemployment.

  6. That is interesting to be paid on the 27th. I wonder why that is, have you asked the Swede?

    Yea, I would assume the concept and celebration of lönehelg is restricted to the biggest cities where wages and costs are higher than anywhere else in the country.

    There is actually no national minimum wage in Sweden. However people in unions or collective agreements maybe require a minimum wage by the employer.

  7. @Sapphire – I have friends who work for the banks, and they are paid on the 27th. Also interesting to know that there is no national minimum wage. But I believe every employee in the country is covered by the unions or collective agreements (sans self-employed).

  8. I was always confused about Swedes splurging on payday. I’ve never been rich, but never thought about waiting for a paycheck to splurge on since I was a teenager. Another thing to consider is that Swedes are taxed on wealth, so even though they save, that don’t have the ability to build wealth/equity due to low pay and the tax on wealth.

    I would like to hear from Swedes, how many would give up the benefits and vacation for the ability to earn more, chance to move up the economic ladder?

  9. @Jes

    Since 2007 we aren’t taxed on wealth any more. And even before that the tax was 1.5% of the amount of your wealth exceeding 1.5 million SEK (~240000 USD) which isn’t an insignificant amount. If you had more than that you would have some problem if you were saving the money in a normal bank account, but there are many ways to invest money that gives better returns.

  10. Your right but the problem is also that to get a pretty simple job you need all kinds of education just to get one that is in reality, not required.
    I dont think cutting down on taxes would help because we’re used to this system, its a good one and people know what it takes to become rich, you need to be abit of an entrepenör(entrepenaur) dno how its spelled in english.
    And the good things is that if you have 25000 every month then people think its a okay, good salary, if you have 50000 SEK people think your a rich and wealthy man, a man to respect.
    These salarys havent got a huge difference but in sweden we think that is a pretty big deal.
    Btw i hate americans with the “Hollywood-complex” completely hate it, grow up is my opinion.

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