Gap widening between rich and poor: study

The gap between the rich and poor in Sweden has grown considerably in recent years, according to a new report from the country's largest labour group.

Between 1991 and 2007, Sweden’s richest 10 percent saw their disposable incomes shoot up by 88 percent, while the spending power of the country’s poorest 10 percent only increased by 15 percent, a new study by the Swedish Trade Union Confederation (LO) finds.

According to the report, real incomes for gainfully employed Swedes have increased by an average of 3.3 percent a year during the last six years. The report also found that there were no significant differences between income increases for blue collar and white collar workers.

But those who are ill, out of work, or living on sickness compensation (sjukersättning) have only seen their incomes increase by an average of 0.86 percent a year over the same period.

Incomes for students have increased by an average of 1.26 percent.

“Developments over the years gone by have to a large extent seen a redistribution from those who can’t work and from those who want to study to those who are gainfully employed,” write LO researcher Anna Fransson and LO working life division head Irene Wennemo in an article published in the Dagens Nyheter (DN) newspaper.

Among the ill, unemployed, and retired, the risk of slipping into poverty has doubled from 8 to 16 percent between 2002 and 2007.

The study defines people living in poverty as those with incomes less than 60 percent of Sweden’s median income.

“The explicit goal of the centre-right government has been to increase the economic incentives to work by making things worse in these groups. A similar development occurred during the previous Social Democratic government through a reduction in compensation levels,” write Fransson and Wennemo.

The wider income disparities are the result of a political choice, according to the authors, who add that all signs indicate that the trend has increased even more since 2007.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Sweden warns of sharper than expected economic slowdown

Sweden's government has worsened its economic outlook, bracing the country for slowing growth and rising unemployment.

Sweden warns of sharper than expected economic slowdown
Finance Minister Magdalena Andersson said trade tensions were slowing growth. Photo: Anders Wiklund/TT
In its latest prognosis, the country's finance ministry expects the country's economy to grow by 1.1 percent in 2020, down from the 1.4 percent it predicted in last September's budget. 
“We expect growth in Sweden to start slowing,” Finance Minister Magdalena Andersson said as she released the new figures. 
“There is a fairly broad consensus on the reason: This is due to trade wars and growing barriers for business, which has generated uncertainty over trade in the future, leading to reduced investment.” 
She said that the lacklustre economic growth in Germany had been a particular problem for Swedish exporters. 
According to the new prognosis, unemployment will hit 7 percent this year and next year, compared to the 6.4 percent predicted in September. 
But Andersson said that Sweden's healthy government finance, the result of years of budget surpluses, put it in a strong position to weather the downturn. 
“We can meet this slowdown without any significant cuts,” she said. “We have the lowest government debt since 1977 and compared to other EU countries were are extremely low.” 
She described the country's finances as a 'welfare reserve' which would allow the government to keep services running and provide fiscal economic stimulus in bad times.
She also said that the government planned this year to channel more money to Sweden's cash-strapped municipalities in through a special spring budget, recognising that growing unemployment is likely to drag on local budgets. 
The government could release emergency financing to the municipalities even earlier, she said. 
“It's obvious that requirements are greater now and will be greater in future.”