18/01/2005 1:17:28 pm
The Public Sector - a Guarantee for Low Salaries. The County of Stockholm delvivers some 90 % of the health care in the capitol and pays for almost 100 % with tax money. Today it was announced that the salaries for some 1400 nurses will be lowered substantially; between 1000 and 5000 SEK (110 and 550 euro) a month - after tax. That is an extreme event in Sweden, being highly unionised and regulated. I think it shall be possible to lower salaries, but that it should be unnecessary in this case. The demand for health care is enormous, which if anything should push wages upwards. But not in the monopoly. Demand and supply simply cannot meet. Taxes cannot be raised any more so there is no more money. When taxes is the only way to finance something, you limit the supply. Moreover, the monopolies hamper productivity and hence the basis for increases in salaries. Last but not least, with a limited number of employers, the nurses get little opportunity to negotiate their salaries. Thus, keeping the public monopolies is a guarantee to have low salaries for the people working there. Why would anyone want that?