Growing number of poor among those on sick leave, jobless and pensioners

The very richest and the very poorest people were those most affected by the economic crisis. These are the findings of a recent LO report on the Swedes’ incomes in 2008. The crisis, which hit in 2008, reduced the distributions of incomes in Sweden. Concurrently, the number of people with low incomes continued to escalate and in 2008 every tenth female blue-collar worker lived in a low income household. This was also the situation for every fifth person on sick-leave, jobless or pensioner.
The LO report “Incomes and distribution of incomes” is based on revisions of research made by Statistics Sweden on the economy of Swedish households. Among the gainfully employed, female blue-collar workers have the lowest incomes. Senior male salaried employees have the largest incomes. These were, in 2008, 525 700 SEK/year (Euro 54,800) on average.

The unjust conditions in working life are one important explanation to the substantial income gaps. Insecure forms of employment and part-time work are considerably more common among women blue-collar workers than among other groups. Wanja Lundby-Wedin, LO President, says that only every second female blue-collar worker has full-time employment during the whole year.

The LO report shows that the number of people with large incomes decreased as a consequence of the crisis in 2008. Eight percent of the population had a disposable income which was more than twice as high as the median income of all employees in 2008. The previous year, the number of employees with large incomes was 8.5 percent of the population.

According to standards used by LO, i. e. the total disposable incomes (capital gains inclusive), the income gaps diminished in 2008. The explanation is decreased capital gains. Apart from capital gains, the income gaps increased slightly in 2008.

Concurrently, the number of persons with low incomes increase, i.e. those with a disposable income less than 60 percent of the median incomes of all employees. In 2008, a disposable yearly income of 126 400 SEK (Euro 13,100) was considered to be a low income. 10.2 percent of the population had a low income as compared to 9.4 per cent in 2007. The number of female blue-collar workers between 20 – 39 years of age with low incomes increased to over 11 percent in 2008. In 2007, this figure was 6 percent.

The trend towards more and more people on sick-leave, jobless and retired persons living in households that run the risk of being trapped in poverty continued even in 2008. Close to every fifth person on sick-leave, jobless or retired lives in a household with low incomes. This grouping includes, according to Statistic Sweden’s definition, persons between 20 – 64 years of age, who have their principal incomes from pensions, sick pay or labour market subsidies.

These income data from Statistics Sweden show on paper the consequences of the non-Socialist government’s policy to increase the gaps in society. In 2008, the government introduced the second phase of tax relief for those with jobs.