Maid in Sweden: clean home, dirty money?

Few would argue with the merits of a clean house, yet Swedes don't seem ready to sweep the issue of hiring domestic help under the rug. And as Paul O'Mahony discovers, controversial tax breaks are only part of the story.

• Swedes back housekeeping tax relief (3 Mar 10)
• Opposition to end housekeeping tax relief (2 Mar 10)
• Housekeeping tax relief divides opposition (28 Feb 10)

Few people in Swedish life can sour a conversation as quickly and reliably as the woman who comes to clean the house. Three years ago, the country's collective blood pressure rose to dangerous levels when the government made good on its promise to provide controversial incentives for home cleaning services.

Now, with just days remaining before Swedes go to the polls, a reform slammed by the opposition as class-based and regressive again forms one of the election's principal ideological fault lines.

Sweden's oft-cited 'maid debate' began in earnest in 1993 when a Moderate Party member of parliament committed the political equivalent of church flatulence by proposing tax deductions for household services. Anne-Marie Pålsson recalls the long, wet summer in which she was routinely portrayed as a reprehensible enemy of gender equality.

”I was given the title 'male chauvinist of the year' by a women's organisation, while the Expressen tabloid referred to me as a 'borderline witch',” she tells The Local.

Pålsson says she was astonished by the force of the reaction, which she believes has its roots in the history of the party that ruled Sweden for much of the twentieth century.

”A lot of people in the Social Democrat movement have parents and grandparents who worked as household servants and have very negative memories of the old 'upstairs downstairs' mindset. Also, the Social Democrats had built up new Swedish modes of living over a long period whereby men and women were expected to do exactly the same things, from running companies to ironing shirts. My idea would partly entail a division of labour, which just didn't suit their way of thinking.”

Supporters argue that the reform has several benefits. First off, it allows parents in dual income families to spend more time with their kids. Also, it creates jobs for marginalized groups, primarily immigrant women, who might otherwise struggle to gain a foothold on the labour market. Although there have not yet been any major independent studies on its effects, experts at the National Institute of Economic Research believe the reform to be cost-neutral, since it is likely to create enough tax revenue to compensate for the state's outlay. Finally, with household services now more affordable, people are less inclined to scour the thriving black market for help in the home.

It was this latter aspect that first prompted Monica Lindstedt, one of the founders of the Metro newspaper, to set up what was to become one of the market leaders in the home services industry. As a hard-working and highly successful businesswoman with four children, she desperately wanted help with household chores but wasn't prepared to resort to illegal means.

”I established Hemfrid in 1996 mainly to solve my own problems. I didn't want to use the black market and there were simply no legitimate services available,” she says.

Already a major success story by 2007, Hemfrid entered a phase of rapid expansion after the government allowed people to deduct from their tax bill half the cost of household services such as cleaning, cooking, lawn-mowing, snow-shovelling and babysitting. The model works in such a way that service providers subtract the deduction from every bill before reclaiming the shortfall from the tax office, thereby removing the burden of paperwork from the end consumer. Nobody is quite sure how many jobs have emerged from the reform, but Lindstedt reveals that her own company has been able to more than double its workforce in the last three years.

”We had 450 staff members in 2007 – we now have 1,030. Our employees represent 40 different nationalities of all ages, more than half of whom were previously unemployed.”

Perhaps unsurprisingly given her first-hand experience, Lindstedt is deeply critical of the Social Democrat-led proposal to scrap deductions for work in the home (RUT) while retaining a parallel system for home renovations (ROT)*.

”They're prepared to implement stimulus measures for men but not for women,” she says.

Social Democrat member of parliament Marie Nordén, a deputy member of the parliamentary committee on industry and trade, strongly rejects the charge that her party favours deductions that benefit male workers.

”We were the ones who first introduced ROT and we did so to stimulate an industry that needed support. It's not intended as a permanent subsidy and has nothing at all to do with whether men or women perform the service.”

She also notes that the Red-Greens intend to expand the ROT system to include repairs to run-down apartment blocks and schools. What's more, Nordén contends there is a major difference between the Social Democrats' move to bolster a stagnant building sector and the government's use of subsidies to turn a black market white.

”In every other business where there's a high level of cheating we take legal measures to keep a check on it, but in this case the government has chosen to subsidize cheating out of existence. I think the time has come to upgrade the status of actual services. I mean, are they really valued so poorly that the only way to give people who clean private homes a reasonable wage is to use state subsidies?”

The Social Democrats are also less than convinced that RUT subsidies come without a price for the state.

”We believe the money could be better spent in the public sector. For example, we need more staff in municipal home-help services and in the healthcare service,” she says.

There is also a clear class aspect to her opposition as she points to statistics showing that the relatively small group of wealthy Swedes earning more than 50,000 kronor ($7,000) per month are far more likely to make use of the services subsidized by the government than their lower paid compatriots.

”In Jämtland, where I'm from, two percent of households have made use of the deductions. I think we need to look at who it is that benefits from these subsidies. In general we can see that it has been used by groups that have already received major tax cuts under this government.”

Legions of domestic workers, mostly women, will follow Sunday's election with a very personal interest. While wealthy Swedes may still be able to afford to pay, victory for the Red-Greens will place vast numbers of middle-class families in a home-help quandary. Do they continue to fork out for services that free up leisure time with their children? Or will a doubling of the cost mean kitchen table maid debates end in tears for the woman who comes to clean the house?

Marie Nordén believes immigrant women in danger of losing their jobs will be given new opportunities under the auspices of a Red-Green government.

”First of all, it's important to say that a lot of these women will keep their current employment; these businesses already existed before the household deduction came into force. But we'll also ensure that there are jobs in the public sector to provide for people who can't do their own cleaning and actually need these kinds of services.”

At Hemfrid, Monica Lindstedt says the reform has gone some way towards combating extensive illegality in the household services business. But she does not think enough time has yet elapsed to eradicate some of the problems that still blight the sector.

“The household services deduction will remain necessary for as long as there exists a large black market.”

*RUT stands for 'rengöring, underhåll och tvätt' (cleaning, maintenance and laundry).

ROT stands for 'reparation, ombyggnad och tillbyggnad' (repairs, conversion and extension)