Social Democracy: Does it protect the people or hide the defects of capitalism?
"The right in Sweden has for some time complained about the government hiding the unemployment in "programs". But the question only came to the public knowledge when LO, the immensely powerful blue-collar union had one of it's own turn against them. Hans Karlsson, a leftwing heavyweight, concluded that true unemployment was more in the ballpark of 20-25%, not 5% as the government was claiming."
"For a century the Social Democratic Labor Party parties and their allies in the Unions had Full Employment as one of their two ideological pillars (the other being an equal distribution of income). To now admit they have failed in this would be a huge defeat."
This might not seem like a difficult question. After all, the unemployment number is readily available. It takes a few seconds to check up the American unemployment number, 5.1% in May. Sure there are speculations about discouraged workers leaving the workforce, but overall this is a reliable figure, useful for international and cross time comparison.
Not so with Sweden. Yes, there is an official number, 5.2% in May 2005. But this figure is almost completely worthless. The true unemployment number is in fact closer to 20%, as shown below.
Sweden has several massive government programs that contain most of the unemployed, chiefly Early Retirement, Sick Leave, Labor Market Programs and Welfare. In addition, since students get a monthly stipend and loan, many unemployed continue to study when they can't find work.
The right in Sweden has for some time complained about the government hiding the unemployment in "programs". But the question only came to the public knowledge when LO, the immensely powerful blue-collar union had one of it's own turn against them. Hans Karlsson, a leftwing heavyweight, concluded that true unemployment was more in the ballpark of 20-25%, not 5% as the government was claiming. To make things even worse this guy happened to have the name as the Minister for Labor!
A few weeks later another labor movement veteran actually become a whistle blower, resigning and exposing that LOs left wing research institute had pressured him not to include the estimated true unemployment figure in a study. Embarrassing stuff indeed.
For a century the Social Democratic Labor Party parties and their allies in the Unions had Full Employment as one of their two ideological pillars (the other being an equal distribution of income). To now admit they have failed in this would be a huge defeat.
Furthermore, the party won the last two elections on the platform that cutting taxes would jeopardize underfunded Social Services. If Swedes were to conclude much of their taxes doesn't go to welfare, but to support working age adults, their willingness to continue paying them might be reduced.
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