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by Nathan Newman
October 15, 2002
Defying a conservative swing in Europe, Swedish voters on Sept. 15 decisively reelected to government the Social Democrats, the party that has run Sweden for all but nine years of the postwar period and who built what most consider the most generous social benefits system in the world.
A strange success for a government that, according to conservative propagandists, has left its people poorer than most African Americans in the United States. Leading up to the election, a conservative business group published a study that the median household income in Sweden at the end of the 1990s was the equivalent of $26,800 compared with a median of $39,400 for US households. US conservatives widely publicized the numbers to show the horrors of the Swedish welfare state.
So what do the Swedish voters know that these pundits don't?
First, they know the old adage that there are lies, damn lies and statistics. This whole failed propaganda exercise is a good opportunity to walk through how conservatives twist statistics to make their case.
Start with "household income": comparing household income is deceptive since Swedes have fewer people living in each household and fewer people working in each home, so the supposedly larger household income in the US includes more wage earners divided between more people -- essentially an apples and oranges comparison.
On top of that, Swedish workers work an average of just 1,552 hours per year, while United States workers work an average of 1,889 hours. Essentially, Swedes get the equivalent of two months extra time off per year, so any increased annual income in the US is "bought" by giving up the vacations and holidays that Swedes enjoy.
So the key comparison number is really what a person can earn per hour in each country. And here's where you see a fun right-wing ideological trick. When discussing the horrors of the Swedish welfare state, conservatives will bemoan the poverty and low wages of the Swedes. But when discussing regulatory and employment policy, conservatives will argue that hourly compensation costs are destroying business competitiveness in places like Sweden. That is, their workers make too much money and benefits. Sort of odd that such a poor people make more per hour than US workers.
Luckily, the US Bureau of Labor Statistics has periodically done such international comparisons of wages in manufacturing, including employer-paid health, vacation and other benefits (www.bls.gov/mfp/mprklv95.pdf). According to those US statistics, Swedish workers are paid more per hour than US workers when you factor in both wages and benefits. This addresses the obvious fact that ignoring all the non-wage benefits of a welfare state is slightly insane when discussing living standards. If your employer or government is paying for your housing, child care, health care and range of other expenses, just looking at nominal wage rates is just plain stupid.
As far as trends, median wages in Sweden rose 22% during the 1990s even as the unemployment rate fell considerably. In fact, unemployment in Sweden is lower than in the United States. So the conservative propagandists lose again.
It's easy for Americans to feel horror hearing that the Swedish government takes over 50% of peoples income in taxes, but when you remember that those taxes pay for health care and other costs that Americans usually have to pay on their own with after-tax money, the story is quite different.
Most people are familiar with the idea that Europeans don't have to spend their after-tax money on health care, but they don't realize that countries like Sweden also subsidize housing costs. Swedish homeowners spend only an average of 22% of their after-tax income on housing, far less than the housing costs to most Americans, with comparable subsidies for renters as well. As for child care, another big expense for families in the US, parents have to pay only 15% of the costs of child care in Sweden.
So with government and employer funds in Sweden paying for so much of health, housing and other family expenses, just looking at gross income measures misses the real issue of importance to families and voters, which is how much they have to spend after those core expenses are paid. Which is why the Social Democrats in Sweden won reelection once again so handily.
The lesson here for progressives is clear. When government covers core family expenses, people will support the taxes necessary for those programs. Social Security and Medicare are the perfect examples of that in the United States and its clear that if universal health care coverage were extended to all voters, there would be full support for the taxes necessary once people recognized the savings in their family budgets.
Which is why you see the conservative pundits in such a frenzy to discredit the success of the Swedish system. Funny how the voters in Sweden seem to know something that the statistic manipulators don't.
Nathan Newman is a union lawyer, longtime community activist, a national vice president of the National Lawyers Guild and author of the just published book Net Loss [Penn State Press] on Internet policy and economic inequality. Email email@example.com or see www.nathannewman.org.
Posted by Nathan at October 15, 2002 02:53 AM