NCPA - National Center for Policy Analysis


September 13, 2006

Leading up to Sunday's general elections, Sweden's Social Democrats have presented no vision or ideas for the future other than to increase taxes and labor-market regulations, and prohibit private competition, says Johnny Munkhammar, program director for Timbro, a think tank in Sweden.

Instead, they want to get re-elected on their past record.  But Sweden still has the highest taxes in the West, a highly regulated labor market and public welfare monopolies with growing problems.  Additionally, Sweden has one of the worst employment records in Europe:

  • The McKinsey Global Institute estimates Sweden's total unemployment rate to be 15 percent, not the official rate of 7.8 percent, when jobless people in temporary government programs and those in early retirement and disability schemes are added.
  • During the last 15 years, Sweden has decreased the size of the work force more than any other European country, but is has doubled the number of early retirees, who now total 550,000, outnumbering entrepreneurs.
  • There are 22,000 early retirees under the age of 30, up from 13,000 in 1999.
  • Youth unemployment is 22 percent, the fifth-highest rate in the European Union.

Social Democrats have remained in control, despite their record, based on their ability to abuse public power, says Munkhammar.  For example:

  • Half of the taxes are hidden and people are not fully aware of the total tax burden.
  • Labor-market regulations make it in practice mandatory for workers to belong to trade unions -- which, in turn, support the Social Democrats.

The Allliance, a group of center-right parties, recognizes the problems facing Sweden, particularly in the labor market, and proposes some deregulations and cuts in welfare benefits and taxes in order to increase employment and get people from welfare to work.  The program is not radical, says Munkhammar, but at least it's a start.

Source: Johnny Munkhammar, "A Coup d'État in Sweden," Wall Street Journal, September 13, 2006.

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