The Swedish cleaning industry provides a good example of an ethnically segregated labour market. Almost 50 per cent of the workforce was born abroad, and an unknown number of undocumented immigrants are working informally in this labour market, especially in the metropolitan areas. Price pressure in public procurement of cleaning services and unfair competition generate market disturbances and labour abuse. In the light of these structural conditions, the aim of the present study is to discuss the presence of temporary labour migrants from Poland and the Baltic countries in the Swedish cleaning industry. The study shows, that since there is a shortage of jobs in this labour market, there is also a potential risk of competition between previous and new labour migrants, especially in large cities. Hence, when discussing labour migration to Sweden, or other destination countries, we need a broad social perspective that takes into account the impact of existing segregation and labour market segmentation, as well as the balance of power between the social partners and the labour market policy pursued by the governments. Thus, this study also reveals another important factor that most likely has an impact on the comparatively limited inflow of labour migrants from the newer EU countries to the Swedish cleaning industry, namely that the employers can easily recruit workers in Sweden participating in labour market projects, which means considerable wage subventions. In other words, employers can use a tax-funded reserve army of cheap labour to gain competitive advantage, for example in public procurement. This practice worsens the problems of price pressure, oversupply and competition by undercutting labour standards, which may generate further social segregation and labour market segmentation.