Twice as many poor among sick, retired and jobless people

A new LO report indicates that poverty among sick, retired and jobless people has doubled between the years 2002 and 2007. It also appears in the report that the income gaps in society widened during these years, and that the unequal distribution of incomes from capital is an important explanation.

The LO report is based on official income statistics of employees between 20 and 64 years of age. Those who receive most of their yearly income from pension, sick pay or labour market subsidies are ranked as jobless, sick and pensioners.

In 2002, 8 per cent of the sick, pensioners and jobless in Sweden had a low income, i.e. a disposable income which was less than 60 per cent of the median income of the population as a whole. By 2007, the number of poor people had doubled. 16 per cent of the sick, pensioners and jobless in Sweden had a low income. The greatest rise took place between 2006 and 2007.

The number of poor people among the rest of the population has, at the same time, been unchanged in general. Between the years 2002 and 2007, the number of poor people among blue-collar workers and white-collar workers remained at some 4 per cent. This signifies that poverty is four times as common among sick, pensioners and jobless people compared to the rest of the population.

Since 1980, the tendency has been that the income distribution has become more and more unequal. Between 2002 and 2007, the income distribution gaps soared by almost 20 per cent. About 50 per cent of the increase can be explained by the unequal distribution of incomes from capital.

There are, above all, two reasons for the soaring gaps of incomes. The first reason is that the difference between those who have jobs and those who have no jobs has increased. This is, partly, due to increases of real wages but also to deteriorations of security schemes and reduced taxes for those who work. The second reason is that incomes from capital have increased considerably among the richest people, Anna Fransson, expert at the LO Department for Working Life and author of the report, says.

The report also indicates that two important factors, which influence incomes, are forms of employment and employment rate. Among blue-collar workers, there is a difference of some SEK 50 000 of income per year for women and some SEK 100 000 of income per year for men depending on whether they have permanent employment or fixed-term employment. Less than 50 per cent of women blue-collar workers have full-time employment during the whole year, while nine out of ten men white-collar workers have full-time employment during the whole year.

It is of vital importance to be established in the labour market on a regular basis. Periods of unemployment between different jobs are a setback to the individual’s economy. The safety schemes are needed to provide security for those who cannot work or have no jobs but also for all of us who run the risk of meeting with these difficult situations. Everybody’s safety is undermined if we let the incomes of the sick, jobless and pensioners lag behind, Irene Wennemo, head of the LO Department of Working Life, concludes.