When companies are looking ahead and formulating their strategies for the next few years so characterized these particular of a tougher competition and faster technical development. As a consequence, the wage cost has become an even more important factor for the competitiveness in all parts of the business.
Several years with wage cost increases that have been higher than in comparable countries, and that exceeded the produktivitetsutvecklingstakten, has undermined american competitiveness. This according to a new report from the confederation of Swedish Enterprise.
The last decade, the competitive environment intensified significantly, driven by globalisation and digitisation. An increasing number of sectors and stages will be competitive. The competition is now global for an increasingly broader part of the business.
We differentiate ourselves from most competitors by high minimum wages have, and the relatively low wages for highly qualified workers.
With international competition meant that the starting point for pricing is not their own costs, but the international competitors ‘ price. For industry, this has been the norm for decades, but for other industries, this internationalisation has accelerated in recent years.
In this report, we analyze the different aspects of salary impact on competitiveness. The conclusion is crystal clear: Price and cost pressures in relation to productivity are crucial for competitiveness. In a short term perspective – where it is about to get provision for the existing production and thus clear the jobs and generate resources for further development – it is basically everything.
, and even more clearly compared to the EMU area. Costs have also increased faster in Sweden than in the rest of the world during the last few years. According to statistics from Eurostat, the average labour cost for total economy per hour 12 per cent in Sweden over Germany’s and 20 per cent of the countries included in the Kix index, Sweden’s most important trading partners. Certainly, the rate of wage increases slowed down in Sweden – but the slowdown has been even stronger in Europe.
a growing number of sectors directly exposed to international competition. Therefore, it is no longer possible to talk about a protected and an unprotected sector. Increased global competition have found their way into every nook and cranny of the Swedish labour market, outside the public sector. For the service sectors, trade is the price level significantly higher compared with competitors on the global stage, but also the industry is higher.
this development has a price. Despite the recent years of weak krona, Swedish exports have grown less than what the markets have done. We have lost market share compared to most competing countries.
But Sweden’s productivity growth has followed a global weak produktivitetstrend and even to develop very weak next year. A lower productivity growth means that the scope for wage cost increases reduces.
Between 1993 and 2006, that is to say, between the nittiotalskrisen and the financial crisis, the average productivity in the business sector 3.6 per cent per year. Since the financial crisis has on average been 0.6 per cent. At the same time, the Swedish real wages have grown by 1.8 per cent per year. In the year of expected productivity growth in the business to be even lower, to 0.3 per cent. In the public sector since several years, a negative productivity growth. This is also reflected in the economy as a whole, where productivity growth fell from close to 3 per cent between 1996 and 2006 to 0.5% in the period 2007-2018, which is a slightly weaker development than in the rest of the world.
Link to the graphics
That over a long time may increase labour costs at a higher rate than productivity increases is not sustainable in the long term. Despite a relatively strong industry, we take out more than what the companies are doing.
. There is no alternative model of negotiation to set that in a better way would work for a wage that increases competitiveness. The two decades before industriavtalet meant sky-high salary increases in dollars – but in real terms during the one-half percent per year. Without a wise practice if we are unable to safeguard Swedish competitiveness.
we are Looking overall we can see that Swedish companies are at the forefront in the global arena. Sweden is today deeply involved in global value chains and participate in an increasing extent in the parts of global value chains provides the opportunity for well-paid employment.
But there is more to give. The ultimate purpose of competitiveness is to increase residents ‘ prosperity. Sweden was in place eleven among the world’s countries in the OECD välståndsliga year 2017. Despite the fact that our position has remained around the site ten for a number of years, so has the distance in terms of prosperity to the five highest ranked countries have increased since the beginning of 2000-century.
We distinguish ourselves from most competitors by high minimum wages have, and the relatively low wages for highly qualified workers.
A compressed wage structure in combination with the high marginal tax rates and low training voucher, is completely at odds with a long-term ability to maintain and develop competitiveness. It becomes a problem in terms of cost, when it comes to simpler jobs, and it reduces the opportunity to recruit for highly skilled jobs.
From both a short – and long-term perspective, it is extremely important how wage formation works. Too rapid a cost increase strikes directly against the competitiveness. In the long term determines, inter alia, skills development, flexibility and dispute policy. There are issues that are directly linked to the Swedish partsmodellen and hence to contract and lönebildningsprocessen.
, after the current three-year contract then expires. It will be the beginning of a round of negotiations that will include 2.8 million people within the 500 contracts. All sectors of the business community are concerned.
We have much to gain in ensuring a well functioning and long-term, thought out practice. Our goal learn the obvious. The required agreements for stronger international competitiveness and more jobs in Sweden.