Labour income effects of the recent “mining boom” in northern Sweden Or What happens with the saleries on the whole

regional labour market when one sector is successful?

Sofia Tano, Örjan Pettersson, Olof Stjernström

The why, how and what outline

• Why is Swedish mining boom interesting? – The historical fluctuation in

metal prices

– The regional and local effects of global boom- and bust cycles

– The “empty” north and the provision of labour force

– Managing a resource and the idea of the sustainable economy

– Who benefits? – Geographies of power and income

Department Geography and Economic History

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The effects on the regional labour market

• Measured as salaries

• Supply and demand of labour force

• Mobility strategies

• The spread effects in the local and regional economy

Department of Social and Economic Geography

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What?

• The paper studies the effect on an individual level, by comparing the changes in labour incomes for residents in the mining municipalities to those for employees residing in other parts of Sweden (except the three main metropolitan areas)

• Local tax!

• Income effects might differ depending on time, space and sectors

• Are there any regional differences in salaries depending on the boom- and bust cycle in the mining industry?

• Centrally negotiated wage agreements between the two major actors on the labour market. No state interference

Department of Social and Economic Geography

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Department of Social and Economic Geography

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Department of Social and Economic Geography

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Mine Municipality (County*) Main product(s) Operating

Kirunavaara Kiruna (N) Iron ore 1860s-

Gruvberget Kiruna (N) Iron ore 2010-

Malmberget Gällivare (N) Iron ore 1820s-

Aitik Gällivare (N) Copper 1968-

Björkdal Skellefteå (V) Gold 1989-

Renström Skellefteå (V) Copper/zinc 1948-

Maurliden Norsjö (V) Copper/zinc 2000-

Maurliden Ö Norsjö (V) Copper/zinc 2010-

Storliden Malå (V) Zinc/copper 2002-2008

Kristineberg Lycksele (V) Copper/zinc 1940-

Svartliden Lycksele/Storuman (V) Gold 2004-

Blaiken Sorsele/Storuman (V) Zinc 2006-2008

Source: Nordregio (2009), Bergsstaten (2009) and SGU (2012)

Prices…

Department of Social and Economic Geography

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How…(methodology)

• Each individual with an income in the mining municipalities is compared to a similar person elsewhere (outside the mining municipalities)

• Base year 2004 and six year onwards

• Income development

• Working population (20-64)

• Dependent variable: Income changes between 2004 and every year from 2006 – 2010.

• Only work income

• Data comes from a geo-referenced and relational database with information of all individuals in Sweden between 1985-2012 (register data)

Department of Social and Economic Geography

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Result, result, result and some implications

• The major impact on incomes have been in sectors closely related to the mining such as Manufacturing and extraction and Construction Which means that employed individuals in these sectors have higher salaries than other individuals in the same sector but outside the mining municipalities

• Rather big differences between the two study areas. More significant results in Norrbotten compared to Västerbotten. Probably because the mining industry in Norrbotten is more predominant than in Västerbotten.

Department of Social and Economic Geography

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More results

• There is a spill-over effect to other sectors as well, in particular in Norrbotten. The exception is the Public sector.

• Possibly an effect of the supply and demand of miners in a boom which affects the whole community by urban growth and accompanying persons

Department of Social and Economic Geography

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Boom…and bust

• What happens in the local and regional economy in a bust?

• Same but opposite? Probably not. The systems supports the demand, keeping the unemployment down

• But, yes. The market crashed in 2014

• Falling prices on metals

• Northland 2014

• New mines?

• The slow down of the urban transformation in Gällivare/Malmberget and Kiruna

• Reduced work forces

Department of Social and Economic Geography

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Next boom?

• Yes, in 20xx we will experience a new mining boom!

• Iron ore?

• Rare earth metals?

• Uranium?

• Market driven – what happens in China, Europe, US? Other markets?

• The future labour supply and urban transformations

• Long distance commuting!

• FiFo!

• Is there a need of Hjalmar Lundbom inspired urban environments in the Arctics?

Department of Social and Economic Geography

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Tano, S., Pettersson, Ö., & Stjernström, O. (2016). Labour income effects of the recent “mining boom” in northern Sweden. Resources Policy, 49, 31-40.

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