Mr. BENGTSSON. Yes. All of this money is allocated to the Labor Market Board so they can use it to create new jobs.

Senator NELSON. That was $1 billion last year or this year?

Mr. BENGTSSON. Yes, $1 billion this fiscal year.

Senator NELSON. What would the comparable figure be for the United States?

Mr. BENGTSSON. It is 7 percent of our total Government expenditure in our country.

Senator NELSON. Seven percent of your total budget?

Mr. BENGTSSON. The Government expenditure is 7 percent for labor market.

Senator NELSON. We are about $300 billion, so the comparable figure would be about $21 billion.

Mr. BENGTSSON. Labor market training alone, plus ad hoc measures for the provision of employment-the latter mainly on behalf of different groups of handicapped and elderly persons-involves about 4.25 percent of the labor force every year.

This commitment is prompted by efforts to reduce the dropout rate from the labor market and to increase opportunities of choice and find places for new groups that have hitherto been excluded from the labor market.

Senator NELSON. Does this expenditure, or these jobs and expenditures fluctuate with the economy then, I take it?

Mr. BENGTSSON. Oh, yes.

Senator NELSON. If you have in the private sector 100 percent total employment, you would have almost nothing then

Mr. BENGTSSON. No, the expenditures increase every year but more so when the economic activity is slackening. You need always a lot of money for labor market policy because there are always people who do not get jobs in the private sector. They are elderly, handicapped and so on, so we have to create jobs for them in a period of high unemployment such as we have now.

There is another task of labor market policy and that is to simplify the recruitment process for firms in need of personnel.

Senator NELSON. You mean recruiting for the private sector?
Mr. BENGTSSON. Yes.

Senator NELSON. Is that part of the $1 billion?

Mr. BENGTSSON. No. Yes, it is.

Senator NELSON. That would be the equivalent to our Employment Service?

Mr. BENGTSSON. Yes.

We have recently introduced legislation to provide security of employment. And we have brought with us the text in English of these new laws as well as the report of our manpower program for 1973, the budget proposals for the next budget year 1975-76, and the terms of commitments to the National Commission on Employment, which I have recently set up. And I submit these papers for the record.

Senator NELSON. They will be received for the record and inserted at the conclusion of your testimony.

Mr. BENGTSSON. Among other things, this legislation means that an employer cannot dismiss an employee without an objective reason. It also entails a prolongation of periods of notice and the payment of wages during such a period to the person who has been dismissed.

The new legislation has given the unions a much bigger say in the personnel policy of firms. We have also acquired rules making it possible to provide employment for people encountering difficulties in the labor market.

The so-called adjustment groups, which have to be organized at every firm having more than 50 persons, are one of the instruments we use in our work to establish job security and so prevent people from being forced out of the labor market.

These adjustment groups include representatives of the employees, management and the Employment Service. Their task is to adjust the jobs to the capacity of the individual.

In this sense, labor market policy is now entering into the factories to cooperate with management and employees in solving labor market problems where they arise.

As regards the labor market policy which people encounter at their local employment office, our aim is for the applicants always get service in one or another respect.

We hold that an unemployed person who visits an Employment Service Office should always have some kind of assistance. Otherwise we run the risk that the employment service office will be regarded only as an unemployment center.

An applicant must get information and guidance concerning current vacancies. And we are now going to test the idea of compulsory registration of all vacancies, so as to enable the Employment Service to work still more efficiently.

Senator NELSON. Do you mean any vacancy in the public and private sector must be registered?

Mr. BENGTSSON. Yes; in the private sector and in the official sector. We have not decided yet in detail how that should be worked out. Of course, if you need a person for one day, it is not necessary to register that vacancy. The important jobs should be listed at the Employment Service Office.

The applicant must also be able to receive help in the form of vocational guidance or ability tests from the vocational rehabilitation service and from that portion of the Employment Service which is especially equipped to take care of problem cases, the ultimate aim being for the individual concerned to find his or her way to the labor

market.

If it is not possible for an unemployed to get a new job in his home area, the applicant must be given financial support so that he or she can move to a new locality where work is available.

Furthermore, he or she must get training in order to qualify for the vacancies which exist or will exist in the future. The training program in our country is an essential part of labor market policy. And the Employment Service Office decides who is to obtain training.

Labor market training involves some 3 percent of the labor force every year. It is highly flexible and has proved very efficient. Roughly 85 percent of those undergoing this training obtain permanent employment within 3 months of completing it. And plans now exist for a reform and further expansion of the labor market training facilities. I would like to give you a few facts about the measures we take to stimulate employment.

Obviously the commonest measures for the promotion of employ

ment are part and parcel of general economic policy. These general measures need, however, to be supplemented within the framework of labor market policy in order to improve the employment prospects of certain groups and certain regions which cannot fully avail themselves of the measures of economic policy.

The labor market situation is by no means uniform, the level of economic activity varying considerably between geographical areas as well as between types of activity.

At present there is a labor shortage in many sectors. For example, at the shipyards and in engineering, which is geared to exports, whereas building and construction is facing long-term problems of demand on top of the customary seasonal variations.

Job opportunities also vary greatly between well-trained young persons and the elderly, the handicapped and those with local ties. The most marked differences, however, are those between regions.

Between northern Sweden, which has one-seventh of the national population, but 40 percent of the unemployed, and the expansive southern and central regions. These differences in employment cannot be tackled solely with general measures of economic policy. This would inevitably generate very excessive pressure in the economy.

Consequently, we have to take selective measures aimed at the areas or sectors where, and lasting during the periods when, demand is insufficient to generate full employment in a balanced economy.

Among our measures to stimulate employment, relief works, which is more or less the same as your unemployment program, are most important. These projects are provided for unemployed persons and for persons who have difficulties in obtaining work whatever the current economic situation may be.

Relief work projects may be concerned with investment activities or with maintenance work and the production of services. Work may be commissioned by the State, by local authorities, that is municipalities, or by private customers.

Relief work projects are financed partly or wholly out of special allocations placed at the disposal of the Labor Market Administration. State relief work projects are entirely financed out of the allocations of the Labor Market Authority. Municipal and private relief work projects normally qualify for 33 percent State grants.

The Labor Market Authority alone determines when and where different relief work projects are to be started and is in full control of the recruitment of labor for these projects.

Relief work projects particularly serve to bring forward an investment or some other scheduled activity so that it will create employment opportunities when, from the point of view of society as a whole, those opportunities are needed in order to combat unemployment. Relief work projects were launched on a considerable scale during the recession encountered by Sweden between 1971 and 1973.

State grants for municipal and private relief work projects were raised to 75 percent, at the same time as the projects themselves came to focus more on an increased production of services, on nursing and so on. The purpose of this change of direction being to combat growing unemployment; for instance, among women, young persons, and salaried employees-including graduates.

Senator NELSON. The matching funds by the State were raised to 75 percent, you mean 75 percent of what?

Mr. BENGTSSON. Before that we gave 33 percent, as I mentioned earlier. Normally we give 33 percent, but we raised it to 75.

Senator NELSON. The matching funds by the State were raised to 75 percent?

Mr. BENGTSSON. Yes. They got 33 percent normally but during the recession they got 75.

Senator NELSON. I see.

Mr. BENGTSSON. At its peak, the number of persons thus employed was approximately 50,000, that is nearly 1.5 percent of the labor force. The relief work projects were divided between road construction, silviculture, housing construction, military work, tourist, and recreational projects. And, as I mentioned just now, the production of services and nursing work of different kinds. Total expenditure for fiscal year 1972-73 in connection with labor market policy was nearly $1 billion.

As the economy began to pick up again in 1973 and the early part of 1974, the number of relief work projects was reduced considerably. At the present vigorous state of business activity, our relief work projects are mainly for elderly and handicapped persons or for locally tied persons.

A high degree of preparedness is required in order for relief works and other measures to be applied flexibly and in swift response to trade fluctuations. We, therefore, award special State grants to encourage the municipalities to plan projects which can be started in the form of relief work should the need arise.

The fundamental requirements where relief work projects are concerned are that they must be able to start at short notice and that it must be possible to curtail them at practically any moment.

The Government can also bring forward State investments, mainly in order to combat unemployment in the building sector.

A large number of permits to this effect were granted during the budget year 1973-74. Each year a review is conducted of all State building projects that may qualify for being brought forward in this

way.

All State building activities can be brought forward. For instance, the construction and renovation of buildings, accommodating the national administration, police stations, airports and airfields, railways, universities and research institutions. Other possibilities include the stockpiling of materals for the armed forces and of products needed for economic defense.

Other public activities are also integrated with employment policy preparedness. For instance, during the 1971-73 recession, the Government increased State grants to municipalities building sewage treatment plants. During this period the State paid 75 percent of investment costs. These grants boosted employment considerably in the constructional and engineering industries.

At the same time, 50 percent State grants were awarded to industry-private industry-for environmental investments for the prevention, among other things, of water and air pollution and for noise abatement.

Senator NELSON. May I ask here, these 50 percent grants by the State were made to private industry for the purchase of equipment or building structures to control pollution?

Mr. BENGTSSON. Yes; that is true. We give them normally 25 percent of the costs during a period of 5 years. I should mention that we have a very strict regulation and law for new industries in order to avoid pollution of air and water. And that goes for privately owned industries too, that we give them 25 percent, if they make some arrangement in order to improve the situation. They can buy equipment, they can build something. But in this period we are giving 50 percent in order to increase the amount of jobs.

Senator NELSON. Mr. Secretary, may I interrupt to say that Senator Javits of New York has just arrived. He is on the Labor Committee and he is the senior member on the minority side, and he has had a long-time interest in the field of public employment, public works projects. This is Secretary of Labor Bengtsson.

Senator JAVITS. You go right ahead.

Senator NELSON. I was interested in this, Senator. They make direct grants to industry for the building of pollution control devices and so forth.

Is this only during a period of unemployment that you make these grants to industry or is it an overall general policy?

Mr. BENGTSSON. The 25 percent I mentioned is also for when we have a peak period of full employment. But the 75 percent and 50 percent that was during the recession.

Senator NELSON. But in normal times an industry that needs to build a sewage treatment plant or pollution control device will receive a 25 percent matching grant from the State?

Mr. BENGTSSON. That is quite correct, sir.

Senator NELSON. When you have an incidence of high unemployment you increase it to 50 percent?

Mr. BENGTSSON. We did so the last time we were in recession; yes. And we can do so in the future, if necessary.

Needless to say, these activities have been highly beneficial from an environmental point of view, and they have given Sweden what is probably the most extensive and most efficient waste water purification systems in Europe.

I talked about municipalities who got 75 percent and they built a lot of new sewage treatment plants. And everybody can see the results. Lakes that once were polluted now have clean, clear water where people can swim safely.

A similar idea has prompted the Government resolution whereby firms with annual profits of $25,000 or more are to place at least 20 percent in a tax free working environment fund. This money can then be applied to improvements to the working environment or to other measures designed to improve the conditions of employees.

First and foremost these funds are intended to finance measures to reduce the risks of accidents and occupational diseases, but they can also be drawn on to finance sanitary facilities, new canteens or the renovation of old ones, changing rooms, recreation facilities, et cetera, for the benefit of employees.

Senator NELSON. Is this compulsory?