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Swedish CEO salaries 'unacceptable': union

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Swedish CEO salaries 'unacceptable': union
12:05 CET+01:00
The CEOs of Sweden's 50 largest companies earn on average 40 times more than an industrial worker, a finding that a union organisation head believes is "totally unacceptable" and requires a "popular uprising" to remedy.

The average Swedish CEO of the country's 50 largest companies earned just over 12 million kronor ($1.8 million) in 2009, equivalent to the salaries of 40 industrial workers, according to Wanja Lundby-Wedin, the head of the Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO).

"Prime Minister Fredrik Reinfeldt has repeatedly asserted that income inequality has not increased since 2006. This is not true," wrote Lundby-Wedin, along with LO economists Jeanette Bergström and Ola Pettersson, in an opinion piece published in Dagens Nyheter (DN) on Monday.

The trio referred to an LO report released on Monday, claiming it showed that the salaries of the executives of Sweden's 50 largest companies "stand in a class by themselves in a 'bureaucratic elite'" consisting of "managing directors, chief economists and other top managers in government and private business."

LO's annual review of the difference between the executives' and industrial workers' wages have not produced any effect. The gap has increased, although the financial crisis reduced it slightly from 2007 to 2009.

However, it is probably just a blip in the curve, according to LO.

"It is clear that we have not succeeded," Lundby-Wedin said at a seminar on the power elite's wages.

When asked if the LO is too toothless, she said, "We cannot be those who determine the directors' wages."

According to Lundby-Wedin, the aim is to shape public opinion and create a "popular uprising" against the excesses of the directors.

According to the report, the difference in average wages between workers and the "bureaucratic elite" years from 1950 to 1980 went from the salaries of 11 industrial workers to five.

However, it has grown in the last 30 years and the average salary of the elite in 2009 was eight times higher than an industrial worker's. In the same time period, the salary of CEOs at large companies fell from the equivalent of the wages of 26 industrial workers to nine, only to increase again to 41.

The abolition of taxes on wealth, inheritance and donations have "very likely" increased the difference between the "bureaucratic elite" and industrial workers, the trio wrote.

The ruling Moderate Party slammed the findings.

"You can see from the statistics, there was an increase under the Social Democrat governments and a peak in 2007, but we only took power in 2006. The increase seems to have stopped," Anna Kinberg Batra, group leader of the Moderate Party, told The Local on Monday.

"We have also focussed on the greatest inequality: those who have a job and those who don't. We are lowering the threshold for those with the weakest position. That is the most important," she added.

On top of that, tax cuts have benefited lower income groups in addition to the highest income earners, Kinberg Batra observed.

"The study shows income before tax, so it is difficult to compare real income. For the lower groups, we have decreased their taxes too for normal or blue-collar workers. It has enabled people to go from benefits to get back to work, improving the incentive to rejoin the workforce," she said.

Kinberg Batra questioned findings since it appears at the very least, the gap is not increasing.

"More people are at work and the differences between the different groups is diminishing. Our aim is twofold: keeping stable public finances and steady interest rates and getting people into work, whether off benefits, into their first job or from too-low incomes," she said.

"The level of unemployment is decreasing, I hope this is the result of our policies through lower taxes and active policies such as coaching. People were increasingly leaving the labour market," Kinberg Batra added, pointing out that Swedish society is quite equal compared to most countries.

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