Sweden has in recent decades like all highly welfare statist countries in Europe had problems with a weak economy--something which is particularly apparent in the labor market. Employment--both measured as the number of people employed or total hours worked--is now lower than it was 30 years ago even though population has increased some 10%. As a result the real unemployment rate (including everyone in the ages 20-64 that the state pays not to work) is nearly 25% (The official unemployment rate is 5-6% but that number is as bogus as Iraqi WMDs).
The reason for this is of course a combination of very high union-imposed minimum wages as well as the effects of high taxes and “generous” unemployment benefits and other welfare-type payments which has greatly reduced or in some cases eliminated the incentive to work. Or is it?
Well, not according to Swedish union leader Sture Nordh who in a article in Sweden’s third biggest news paper Dagens Nyheter “refuted” this explanation. The article is written in Swedish which most people here cannot understand, but I can reveal to you that his argument against the obvious explanation does not involve any refutation of the theoretical basis of that explanation nor any attempt to empirically “prove” otherwise (Apart from a brief assertion that Swedish employment is higher than in other European countries, but even to the limited extent that this is true it don’t “prove” anything as these countries have a similar system in the aspects discussed).
No his “argument” consists in pointing to a opinion poll conducted by his union which indicate that a majority of Swedes don’t believe that lower unemployment benefits and lower minimum wages would create more jobs whereby he says this shows that this is not a solution that creates more jobs. So now we are supposed to not only make political decisions according to the will of the majority, the truth of economic theories are also to be settled that way.
The satirical blog post by Art Carden from March 2004 whereby Congress repealed the law of comparative advantage and the law of demand (with Ron Paul casting the lone vote against it) are starting to get not so satirical in Sweden.
