The migrant dimension of vulnerability in the Welfare State: the case of Borlänge, Sweden

The system relied on a high rate of labour market participation, which could generate enough tax revenues for upholding a generous level of public compensation when falling sick, losing the job, having children and retiring. Inequality, measured by the Gini index, was reduced not least during the 1960s and 1970s when females in large numbers entered the labour market and thereby levelling out income differences among females, and between men and women. This, in turn, led to important reforms such as substituting the older family-based income tax for an individual taxation system, further encouraging females to work irrespective of a husband’s income. The rapid expansion of the universal childcare system where all children and families are entitled to subsidized child care under pedagogical leadership (currently used by 85% of all children aged 1 to 5 and 90-96% of children aged 3 and above) should also be seen from the perspective of increasing presence of females in the workforce. This certainly also in itself opened up a new sector for formal employment. In 2020, 96% of the professional childcare workforce (109,000 in Sweden overall) comprised females.

Source: Borlänge municipality. Områdesbestämmelser – Borlänge (borlange.se)

For many decades, the Swedish debate on immigration was focused on the issue of labour migration but labour migrants arriving in big numbers during the 1950s and 1960s were never seen as a problematic feature in terms of operating, growing and maintaining the welfare state. On the contrary, many argued that labour migration was necessary for upholding economic growth in manufacturing sectors, and for staffing public and private service production units. This was also the Borlänge experience and immigrants were in demand and mostly well received. The debate changed in the 1980s when it became apparent that refugee migration in conjunction with emerging de-industrialization and lower demand for un-skilled labour resulted in increasing difficulties for new immigrants to integrate into the labour market. Now many, in particular females from parts of the Middle East, showed low rates of labour market participation. From then onwards the “integration problem” have been on the national agenda and on the agenda of many localities across Sweden, Borlänge being no exception.

In relation to the welfare state, four migrant-related issues dominate the debate. One concerns the long-term funding of the welfare system, which – as explained above – requires a high rate of labour market participation for generating tax revenues and lowering welfare expenditures for the non-working. A second aspect, perhaps mostly voiced by the political right, is the proposition that the generosity of the welfare system (not least universal child allowances and the economically generous 15 months parental leave compensation system) fails to encourage newly arrived people to actively seek to integrate via educational and labour market programmes. Thirdly, an emerging issue is the long-term consequences for female migrants, who will face a low-level pension when they grow old. Although there is a State regulated universal pension, the level is quite low and most retiring Swedes get a substantial part of their pension through the complementary employer’s retirement savings scheme. Finally, the integration problem is framed in the context of its transgenerational dimension and a perceived causal relationship with residential segregation and the existence of negative contextual (neighbourhood) effects.

Refugee immigration to Sweden peaked in 2015 when more than 160,000 entries were recorded. Although far from all applicants were to be granted asylum, this resulted in a very stretched refugee reception system and in further geographical concentration of refugee migrants in already immigrant-dense municipalities and neighbourhoods. The challenge for Borlänge, which saw the number of foreign-born increase from 5,200 to 9,200 in ten years (2007-2017) – most of them from Somalia and the Middle East – is not only to integrate adult newcomers but –maybe more importantly– their children as well.

A residential district in Borlänge, planned and built during the Swedish “Million Programme” period 1965-1974. Dwellings were of good quality and typically built for working class families comprising two parents and two children. Many newly arrived refugee families now occupying these rental dwellings comprise several more children, resulting in overcrowding housing and poor conditions for many children and the young.

The bulk of all immigrants in Borlänge in 2017 had arrived after 2007 and 40% of the 2017 foreign-born population had arrived after 2012. It is not immigration per se that has produced socioeconomic segregation in Borlänge – it existed long before – but as labour market integration of the newly arrived has worked poorly many of them have few tenure options other than renting. And, rental housing is geographically clustered into a fairly small number of neighbourhoods, which have experienced rapidly increasing presence of low income people with an immigrant background. We show in the Uplift Borlänge urban report that while the share foreign-born increased from 8% to 14% in non-poor Borlänge neighbourhoods 2007 to 2017, the corresponding increase was from 39% to 62% in the poorest three neighbourhoods.

The demographic and socioeconomic situation in the three poorest neighbourhoods differ quite substantially from all other neighbourhoods. In 2017, more than 25% were 15 to 29 years old, compared with an average 17% elsewhere in Borlänge. Mean disposable incomes were lower, 160,000 SEK versus 230,000 SEK, primarily because fewer in working ages were employed (58% versus 83%). The integration problem for adult migrants in Borlänge also reflects in school outcomes for the young: only 21% of foreign-born graduate from upper secondary school at age19 compared with 74% of native-born Swedes in Borlänge. Many certainly graduate later (delayed exams) but face a tough competition when applying for higher education or a job position.

Source: Kvarnsvedens bruk – Wikipedia

The Kvarnsveden paper mill in the outskirts of Borlänge started operations around 1900 but closed down in 2021, making 420 employees redundant. Manufacturing industry in the city has declined over several decades and lost about 4,000 jobs 2007 to 2017. Expansion of the service sectors has compensated for this but the manufacturing sector’s traditional role of providing job opportunities for the young, and for migrants, has gradually weakened and this is part and parcel of the difficulties to successfully integrate newly arrived migrants in the labour market.

For Borlänge municipality, having experienced and still experiencing de-industrialization of its steel manufacturing and paper production sectors, structural inequality along the migrant-non-migrant dimension overshadows most other issues. The city identifies the integration-segregation nexus as key to a successful future. A central policy notion is social sustainability and segregation of opportunities is seen as detrimental for a sustainable development. In Borlänge as in other Swedish municipalities, welfare arrangements mostly rely on municipal administration of State-regulated duties (such as providing childcare and after school activities and offering school and ambitious adult education and re-training programmes). Key target groups for extra support are children of all ages. Our interviews with local informants do not reveal any preoccupation or concern with immediate municipal budget-related issues due to the increasing numbers of refugee migrants but rather with the long-term social situation for, in particular, children and adolescents growing up in relative poverty. The geographical concentration of such conditions is identified as the biggest challenge as it leads to a divided city and increasing tensions between majority and minority residents. There is also a concern regarding the racial aspects of such tensions, i.e. that neighbourhoods and their residents are increasingly becoming stigmatized, a fact that does not facilitate integration. On-going Borlänge counter-segregation programmes involve key actors from all municipal departments, including physical planning, education, labour market and social affairs units, and they receive extra funding from a State board, the Delegation against segregation. The latter support signals that Borlänge is among the circa 30 localities in the country most affected by the negative effects of economic and ethnic segregation.

Roger Andersson

Institute for Housing and Urban Research, Uppsala University