Saturday September 5th, 2015

The Wage Scam


Lonesankarna_350Less and less of the growing wealth gets back to the ordinary wage earners. Not in a hundred years, Swedish wage earners have received this little pay for what they actually produce. The past thirty years economical policies has made Sweden a country with sharply rising income inequality.

Financier Rune Andersson is one of Sweden’s wealthiest men. He describes how Sweden has become a completely different country during the thirty years he has been active in the Swedish business.

– In this classic division between labour and capital, the capital has a higher proportion of income in recent decades. Clearly, it’s a remarkable increase.

Over the past century every generation of Swedes experienced significantly higher wages and increased living standards. But since the late 1970s increasingly less of the growing prosperity has got back to ordinary wage earners. The country’s incomes have shifted from wages to profits. According to Lennart Schön, professor in economic history this change can’t be compared with anything other in history.

– The shares of wages in total income in the country have declined dramatically since the early 1980s. We need to go back to 1910 to find such a low proportion of income that gets back to the workers.

In the season’s first Dokument Inifrån Erik Sandberg examines how a series of consciously political decisions made the very rich even richer while the standard of living of the general public is not allowed to increase at the same rate as for previous generations. The basis for economic policy was already built thirty years ago, and both the bourgeois as the social democratic governments have taken measures to keep down wage growth in the country. But the objective of the policies has been a sensitive issue and the politicians have avoided speaking clearly to the voters.

– I would say that they have swept this under the rug and expressed themselves extremely vague, says Lars Calmfors, Professor of Economics.

Politicians’ hope has been that the wage restraint would spur investment and create more jobs but yet unemployment has risen and the investment rate is still low. Perhaps it is time to ask whether the policy has been effective and whether it was worth the price.