Swedes less well off than poorest Americans -study

Saturday May 4, 10:47 AM EDT

STOCKHOLM, May 4 (Reuters) - Swedes, usually perceived in Europe as a comfortable, middle class lot, are poorer than African Americans, the most economically deprived group in the United States, a Swedish study showed on Saturday.

The study by a retail trade lobby, published in the liberal Dagens Nyheter newspaper 19 weeks before the next general election, echoed the centre-right opposition's criticism of the weak state of Sweden's economy after decades of almost uninterrupted Social Democratic rule.

The Swedish Research Institute of Trade (HUI) said it had compared official U.S. and Swedish statistics on household income as well as gross domestic product, private consumption and retail spending per capita between 1980 and 1999.

Using fixed prices and purchasing power parity adjusted data, the median household income in Sweden at the end of the 1990s was the equivalent of $26,800 compared with a median of $39,400 for U.S. households, HUI's study showed.

"Weak growth means that Sweden has lost greatly in prosperity compared with the United States," HUI's President Fredrik Bergstrom and chief economist Robert Gidehag said.

International Monetary Fund data from 2001 show that U.S. GDP per capita in dollar terms was 56 percent higher than in Sweden while in 1980, Swedish GDP per capita was 20 percent higher.

"Black people, who have the lowest income in the United States, now have a higher standard of living than an ordinary Swedish household," the HUI economists said.

If Sweden were a U.S. state, it would be the poorest measured by household gross income before taxes, Bergstrom and Gidehag said.

They said they had chosen that measure for their comparison to get around the differences in taxation and welfare structures. Capital gains such as income from securities were not included.

AMERICANS CAN BUY MORE

The median income of African American households was about 70 percent of the median for all U.S. households while Swedish households earned 68 percent of the overall U.S. median level.

This meant that Swedes stood "below groups which in the Swedish debate are usually regarded as poor and losers in the American economy," Bergstrom and Gidehag said.

Between 1980 and 1999, the gross income of Sweden's poorest households increased by just over six percent while the poorest in the United States enjoyed a three times higher increase, HUI said.

If the trend persists, "things that are commonplace in the United States will be regarded as the utmost luxury in Sweden," the authors said. "We are not quite there yet but the trend is clear."

According to HUI figures, in 1998-99 U.S. GDP per capita was 40 percent higher than in Sweden while U.S. private consumption and retail sales per capita exceeded Swedish levels by more than 80 percent.

The HUI economists attributed the much bigger difference in consumption and sales mainly to the fact that U.S. households pay themselves for education and health care, services which are tax-financed and come for free or at low user charges in Sweden.

According to recent opinion polls Sweden's Social Democrats are comfortably ahead of the centre-right opposition in the run-up to the September 15 elections.


2002 Reuters Limited.


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