All the value that companies in Sweden create can be divided into three parts.
A salary share - which consists of wages and social security contributions - a profit share - which consists of the owners' return - and a depreciation part.
In recent years, the profit share in business has increased year by year, while the salary share has decreased.
"Perhaps have been too restrained"
Between 2018 and 2022, the wage share has decreased from 64.5 percent to 60.0 percent, while the profit share has increased from 16.2 to 20.5 percent.
- Wages have not really kept up with the profit trend.
The wage share is now back at the same low level we had in the 1990s, says Fredrik NG Andersson, docent in economics at Lund University, and continues:
- Then one can ask the question whether we have perhaps been too restrained with wages and whether we don't have to calibrate profit development and wage development a little better in the coming years.
He also warns that conflicts may arise in the labor market if wages do not keep up with the profit trend.
- If workers have to hold back against inflation at the same time as the companies make huge profits, there will be frustration among the workers and there is a risk of conflicts and strikes.
High demands – but real wage reduction
Despite the fact that the trade unions think that they are taking a big hit in this year's negotiations, the Trade Employees' Union, for example, recently demanded the highest wage increase in several decades, so their initial demands for the wage negotiations mean real wage cuts.
The sky-high inflation means that, despite a higher salary, the members will probably have reduced purchasing power.
- We want to take responsibility for not perpetuating the inflation carousel, but it is also the highest demand we have made for several decades, says Linda Palmetzhofer, confederation chairman for Handels.