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How the Swedish household economy has evolved over a 40 years period


 




Tuesday, 06 September 2011
Many Swedish households now have some of the best economy since 1971. This applies to income, assets and opportunities for consumption, according to the Swedish bank, Swedbank in a 40 years study of the evolution of Swedish household finances.

Consumption per individual has doubled, but share spent on food has become less whereas and living is better. A family with two children have twice as much today after the necessary expenses than before but household debt has risen sharply.

Many households have seen improvements since 1971, both in terms of income, assets and consumption opportunity. Wages have risen by nearly 50 percent, total assets are 17 times larger, and consumption has more than doubled, per capita. But taxes have also risen, social protection (welfare benefits) that was first built out, has become sparser, and household debt has reached great heights.


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The Swedes have had a week long vacation since 1970, and work five hours less per week. Wages have risen, the workers increased wages, after inflation, by 35 percent and for salaried employees, it rose by 52 percent by 2009.

The improvements that have occurred in the household economy have primarily taken place over the past 15 years. The child allowances are one of what have increased, whereas many other benefits within the welfare systems has been reduced or eroded all together.

Household wealth is now 17 times larger today, but it is very unevenly distributed. Average wealth is Skr610 000 per person, but median wealth is Skr60 000. Many people though have no money saved at all.

Meanwhile, household debt, mainly in the form of mortgages, has risen sharply. The price of a house has increased by 1,180 percent or 110 percent if we exclude inflation. Swedbank indicate that it is unreasonable that the housing shortage would be held as a factor  for  rise in the house prices which has gone up more than inflation. In addition, prices have risen even in those parts of the country where there are empty homes.

On the whole looking at the most core indicators, Swedebank draws that the cost of food in Sweden has risen in the SEK / person from Skr21 000 to Skr30 000. Prices generally have risen by 580percent. VAT was 17.65 percent in 1971 but now it stands at 25 percent, with some exceptions. Services and more products are now subject to VAT.

A litre of gasoline cost Skr1 in 1971, equivalent to SEK 7 today. The price of approximately SEK 14 represents a doubling. Taxes have on fuel increased from Skr 5 to Skr8, the price of gasoline from Skr2 to Skr 6, translated into today's money.
By Scancomark.se Team


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