Sweden's relative middle class bliss

[stpioc]

This is interesting..

At one extreme is Italy, which experienced a severe economic contraction in the recession after the 2008 financial crisis and has had a very weak recovery since. There, real market incomes were flat or falling for virtually the entire population. At the other extreme is Sweden, where only 20 percent of the population had flat or falling market incomes.

The Death of the Middle Class Is Staggeringly Worse - Fortune

"Socialist" Sweden doing much better than other developed nations in terms of middle class wages, which have been basically stagnant in the US since the 1970s.

It is also interesting because Sweden is a small, open economy, where trade is a much higher proportion of GDP compared to the US. 

This means that globalization and trade are not necessarily responsible for stagnating wages, and the whole backlash against trade and globalization which we have seen from the right (and the left) is a bit of a headfake.

In fact, one of the reasons Sweden does so well might have something to do with the welfare state:

• which might people less fearful of change, as there is a safety net. If people lose their jobs they still have a decent income, and (unlike the US pre-Obamacare) health insurance. 
  
• It might also prepare more people for retraining and finding employment in other sectors. 
  

[stpioc]

Actually, there are also other institutions at work here, apart from the welfare state:

The authors write that the reason for this variation “reflect differences in policy approaches; labor institutions such as the strength of unions and their role, or services for the unemployed; and a widely varying national economic, fiscal, and monetary policy responses.”

For instance, one Swedish trait the authors point to—which they say helped protect workers in the aftermath of the recession—is a strong labor movement. They argue that the fact that 68% of Swedish workers belong to a union helped to keep wages rising. Furthermore, a labor sharing scheme, whereby the Swedish government worked with companies and unions to prevent layoffs by reducing hours worked rather than unemployment helped protect that country from the scourge of long-term unemployment that has depressed workers earning potential in the United States.

The Death of the Middle Class Is Staggeringly Worse - Fortune