Date: Wed, 6 Nov 1996 14:27:32 +0100 (MET)
From: malecki-AT-algonet.se (Robert Malecki)
Subject: M-G: Two articles from my trade union paper. ( Part 2)


The following articles were in the latest number of "Kommunalarbetaren" (the 
Communal worker) my national trade union paper which goes out to all the 
members.712,000 printed issues and the articles are written by Bengt 
Bergsmark. (With his permission over the telephone)

bob Malecki
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SWEDEN

...Great Times
Shining Times

What a crisis? Many people with high incomes can look back on a and 
incredible development in their incomes. It has been "great times, shining 
times" - profits, real raises in paychecks, tax cuts with gigantic numbers.

1994 taxes were cut in half for profits with selling stocks to 12,5%.

When it became clear that the tax levels would be returned to the levels 
before the tax reform of 30% their was an incredible amount of activity 
amongst owners of stocks. Private persons sols stocks as never before in 
order to bring home the profits of the last five years of the markets climb.

Profits for 59 billion crowns were brought home- a trippling compared to the 
previous year.

This is about the same money as 10 years of paychecks for forty thousand 
full time working hospital workers in the the social sector.

A hundreth part of the people own half of all the stocks (1992). They have 
been able to reap the fruits of the record strong stockmarket development 
which followed when profits began rushing tyo new heights.

Those who had time and money to invest big money on the earlier tay 
subventioned pensionsavings plan made a lot of money also.

Between 1990 and 1995 production grew in the economy with 2 to 3 percent. 
The profits (Net) grew with over 70%-20 times!

1995 a fifth of the economic cake went to business. (Net)

This development followed the development from the 80ties which the expert 
Sven Nelander already in 1990 wrote as "extremely positive for the big 
stockholders".

Last year Nelander investigated the income development for Swedens richest 
under the years 1980-1993. The pattern is quite clear, High income groups 
have had an unbelievable much better income development than normal people.

There are a number of main reasons for this development.

.Growing paycheck cliffs.
Not since the statistical bureau began its measurements in the 70ties has 
the differences in incomes been so big as those that were measured in 1994.

Big growths in capital incomes--foremost profits from the selling of stock, 
obligations, buildings and housing.

Powerful tax cuts which have been in the interest of high income groups.

The hundred thousand Swedes with the highest incomes recieved in 1993 a 
approximate of nearly 200,000 crowns more (93 year worth of money) compared too
1980. The 5000 with the highest incomes had before the dubbled real incomes 
a plus of 1,4 milion crowns. The common unit for a fulltime worker was then 
a little more then 10,000 crowns a month.

The richest had their shopping power dubbled.

...And the cliff just gets deeper under Perssons time

During the period 1994 to 1997 the states fianances were strengthened with 
over 100 billion crowns. Sinked subsidies, higher taxes and a shrinking 
public sector.

A fresh analisis from the LO  (national umbrella organisation) economists 
show that the burdens have hardly been treated equally. The income cliff has 
continued to grow
in Sweden.

LO-economists view

The big "cliff" which covers this side of the newspaper gives a statistic 
(see footnote)
picture of how the income cliff has  deepened. 

The income cliff began to grow already in 1982. During the government Olaf 
Palme,Carlsson,Bildt, Persson the cliff just gets deeper from year to year. 
Does this depend  on the politics or the powers of the market which have 
recieved all the more playroom?

This is what the LO economists have to say about this period 1994-1997.

-The income cliff will ontinue to grow. The main reason for this is that the 
political system has reduced the size of the public sectors size.

The claim that the income difference will continue to grow this year and 
next year is buildt on the analisis of incomes which they newly have made.

Traditionally the LO economists have made the prediction about what happens 
in the economy: Production,prices,paychecks,and unemployment.

Now they are trying to estimate what consequences this will have on the 
different groups of incomes.

The LO economists think that paychecks will grow faster with 3% in the 
private sector compared to the public sector.

Enployment in the private sector of business will grow with a hundred 
thousand jobs and will reduce the public sector with 40,000 jobs. A bit 
smaller unemployment amongst men is considered in the analisis.

All this leads too the cliff in incomes between the public sector and the 
privately employed will be larger. The first is believed to take a 4% growth 
in paychecks and the private 6%.

Because the growth in prices are believed too be more than 6.5%. As prices 
are believed to grow with a level about 6.5% thus reducing the shopping power.

A mans income will grow with about 6% and womens in a level of about 4%. The 
cliff between low income workers and the high loaned workers is growing 
also. The high income workers income hikes--usually or nearly are equal to 
the price rises.

Those with real low incomes will recieve a sinking of thheir shopping power. 
Those who will get the worst are the unemployed. Thet will lose about 10% of 
their shopping power.

Not an exact prognosis

In the LO economists figures there is missing a post for income from the 
sales of stocks,buildings and other stuff which the rich high income groups 
during the last years. It appears to be difficult to make a prognos about 
what will happen with these posts.

The prognosis hardly ever give a very good exact prognos of the future. It 
is more of a question of seeing where the direction of the development is 
going. According to this analisis the continued development is towards all 
larger income cliffs even next year, if the present political line lays fast.






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