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Sweden top in equality ranking – but there's a catch

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Sweden top in equality ranking – but there's a catch
Is Sweden trading on past glories? Photo: Jessica Gow/SCANPIX
13:32 CEST+02:00
Sweden has been ranked as the best country in the world when it comes to its commitment to reducing inequality.

Created by Oxfam and Development Finance International, the "Commitment to Reducing Inequality Index" ranked 152 countries on their policies designed to reduce the gap in wealth between rich and poor, with social spending, progressive taxation and labour rights highlighted as the three key areas.

No country is doing exceptionally well, the index noted, and Sweden did not come first in any of the three key measures, but the Nordic nation's overall ranking was the strongest.

"As the name says the index ranks commitment to reducing inequality – we're not looking at actual inequality levels – and if you wanted to be mean you can even say Sweden is trading on past glories," Robert Höglund from Oxfam told The Local.

"A lot of the things were introduced in the past like high social spending, spending on education and healthcare, strong protection for workers and women in the workplace. These are things that have been in Sweden for quite some time."

Swedish policies dating from the last century still compare favourable to many other nations when it comes to tackling inequality, the ranking pointed out.

"Protection in the workplace and how wages are set through negotiations with unions and employers guarantees that people with lower paying jobs have an acceptable salary which is not the case in all other countries," Höglund noted.

"Free education all the way to university also stands out, and spending on healthcare and other social spending is quite high."

READ ALSO: Better distribution of income needed for growth, Swedish finance minister argues

On the other hand, corporate tax rates in Sweden benefit big businesses at the same time as high rates of VAT disproportionately impact the poorest according to the index, and unemployment benefits have not risen proportionately in line with the economy.

"Social spending on unemployment benefit and social welfare has not risen at the same speed as growth, so even though unemployment benefit was raised a couple of years ago, it hasn't had the same pace as the growth of the economy and also salaries. That's one reason why inequality could be on the rise in Sweden," Höglund argued.

The issue of rising inequality has gained significant coverage in Sweden recently, with a survey from earlier this year showing that the number of households in the middle income bracket fell in all but four of the country's municipalities between 2011 and 2015.

"The explanation is the importance of capital income – which is mostly concentrated at the top end of wealth distribution – has increased. At the same time the social security system has not followed general wage developments, which means those at the lower part of wealth distribution lag behind," Stockholm School of Economics associate professor Jesper Roine told The Local at the time.

In March the Swedish government announced it is to create a new agency tasked with tackling segregation, helping socially deprived areas and breaking structural inequality.

READ ALSO: Sweden to get new anti-segregation authority

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