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Swedish Labor Union Seeks To Set Monetary Policy - Demands Lower Rates, Higher Wages

Tyler Durden's picture




 

Forget Chuck Schumer's cat-out-of-the-bag 'get back to work' comments to Bernanke, now it is union-leaders who are advising the world's central bankers. "There is a not a single reason not to lower rates" exclaims Sweden's trade union confederation to the central bank as he begins negotiations with employers on wage deals for next year. His demands (for lower rates) are "far from excessive" and he adds "should not cause inflation" as Swedish organized labor have "never called for levels that ... could not be supported economically." It seems that everyone, from NYTimes bloggers & NY politicians to Swedish Hoffas know best what the central planners must do - and furthermore, it is becoming clear to an increasing mob who is really in charge (sadly).

 

Via Reuters:

The head of Sweden's trade union confederation urges the central bank to cut interest rates to support the slowing economy and says union demands for wage hikes would not trigger inflation.

 

Sweden's economy, which had been one of the most robust in Europe, is slowing sharply. The central bank has indicated that rates are more likely to fall next year than rise but has been reluctant to lower borrowing costs because it is worried about high levels of household debt.

 

"There is not a single reason not to lower rates," Karl-Petter Thorwaldsson, chairman of the Trade Union Confederation (LO), told Reuters on Thursday.

 

Unions, a powerful voice in Sweden which has one of Europe's most unionised workforces. Thorwaldsson said unions would not back down on their demands for an across-the-board wage rise next year of at least 2.8 percent with a bigger rise for those on low salaries, and improved benefits. Given a benign inflation forecast, that would mean a rise in households' real income.

 

"There will be increases in real incomes in Sweden in 2013 as well. Remember where you heard it first," he said.

 

Unions are due to begin talks with employers on a wage deal for next year in the next few months.

 

LO has about 1.5 million members, but a wage deal would cover about 3.5 million workers, or two thirds of the labour force.

 

Thorwaldsson said LO's demands were far from excessive and should not cause inflation fears for the central bank. The bank cut rates in September for the first time in seven months but has kept them at 1.25 percent since.

 

Employers have said such wage rises would put jobs at risk, just as thousands have had redundancy notices, including from blue-chip exporters like truck maker Volvo (VOLVb.ST), telecom giant Ericsson (ERICb.ST) and garden gear maker Husqvarna (HUSQb.ST).

 

Thorwaldsson said the current downturn was not as bad as the 2008/2009 recession, when unions struck an accord with employers on temporary cuts in wages and working hours.

 

"Swedish organised labour has never made demands that we don't believe can be accepted and would never call for levels that we believed could not be supported economically."

 

Thorwaldsson said he saw the likelihood of a need for such deals again, but pointed to the possibility of a German-style, state-sponsored system for temporary shorter work weeks that is currently being examined by the centre-right government.

 

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Fri, 11/23/2012 - 17:11 | 3007322 JeremyWS
JeremyWS's picture

That's gonna end well. 

Fri, 11/23/2012 - 17:25 | 3007330 TruthInSunshine
TruthInSunshine's picture

The Plutocracy will not tolerate this!

Skilled machinists, precision welders, master craftsmen & other fabricators of highly value-added products must not make more than 1/80th (at the most) of those who "produce" credit derivatives or "design ETFs, bitchez!

Prepare for Martial Law & Tanks in the Streets!!!

 

*I'm not advocating for unions or "controls" on wages or benefits of any kind, so don't mis-read my post above to interpret sympathy with any lunatics, whether from "labor" or the plutocracy that owns our politicians, bitchez.  I am and always have thought unfettered, free markets, ruled by the laws of true demand and true supply, to bring about the fairest compensation and prices.

I'm merely highlighting/emphasizing one additional hyproctrical and anti-free market glitch (that can be argued to be the flip-side nonsensical aspect of how FUBARed our economy and very society has become due to the TBTF death-grip the financial/bankster sector has now imposed) in the matrix.

Fri, 11/23/2012 - 17:27 | 3007361 alangreedspank
alangreedspank's picture

I'm not of the plutocracy and I would not tolerate this either. Blatant conflict of interest. We have enough of those with the bankers and government ass toadies.

Fri, 11/23/2012 - 17:40 | 3007378 MillionDollarBonus_
MillionDollarBonus_'s picture

I feel lethargic at the idea of being ‘entrepreneurial’ or ‘improving my skills’. All unions want are better wages, and job security, so they can buy more gadgets and holidays. I’m sick of narcissistic liberations telling workers to ‘improve’ their skills and start businesses. Workers just want money, and they don’t care where it comes from. Fundamentally, libertarians just want to deny decent, hard-working and honest people the right to have a reasonable standard of living. I can’t understand what their motivations are. It’s a mystery to me. 

Fri, 11/23/2012 - 17:48 | 3007392 Bay of Pigs
Bay of Pigs's picture

HAHA. Friday afternoon humor.

Fri, 11/23/2012 - 17:59 | 3007407 Ajas
Ajas's picture

Humor indeed.

 

Mob: "Lower interest rates so that we can borrow more money!"

Banks: "Lower your demand for money, and rates will go down."

That's why rates are where rates are.

Fri, 11/23/2012 - 18:43 | 3007505 Publicus
Publicus's picture

There are two types of people, the creators of wealth, and the accumulators of weath.

 

Fri, 11/23/2012 - 19:30 | 3007597 CrockettAlmanac.com
CrockettAlmanac.com's picture

The creation of and accumulation of wealth are not mutually exclusive. Also you've left out the category "destroyers of wealth" among many other possibilities.

Fri, 11/23/2012 - 23:46 | 3008032 flacon
flacon's picture

""Swedish organised labour has never made demands that we don't believe can be accepted" .... ummm.. MADE DEMANDS?! Who ever is paying the salary has the leverage to MAKE DEMANDS. That is, in a FREE MARKET.... 

Sat, 11/24/2012 - 09:09 | 3008259 laozi
laozi's picture

I know a thing or two about Sweden, and you can simply ignore what the unions say and in fact this entire article.

The unions are losing power in Sweden, and the central bank does not give a damn about what the union head saiz or not.

Ingves, the central bank chairman, is worried about rising house prices. He thinks Sweden has a housing bubble (he is right). He might lower interest, but reluctantly. Bitchez!

Fri, 11/23/2012 - 22:31 | 3007930 Odd Ball
Odd Ball's picture

Um, I think you forgot the destroyers of wealth.

Fri, 11/23/2012 - 23:19 | 3008003 A Nanny Moose
A Nanny Moose's picture

No. Those with loaded guns, and those who dig. You dig.

Fri, 11/23/2012 - 17:49 | 3007393 Bay of Pigs
Bay of Pigs's picture

.

Fri, 11/23/2012 - 18:48 | 3007402 TruthInSunshine
TruthInSunshine's picture

Get government out of the business of subsidizing labor (unions) OR plutocrats (CronyKomradeKapitalists in the Defense-Bankster/Financial-WallStreet complex), period.

1)  "Liberate" politicians of any ability to be owned or subservient to any special interest other than the voting public writ large. In fact, treat the act of showering or attempting to shower subsidies on industry, unions or any sector of the economy as one would treat sedition.

2)  Forbid government subsidization of private industry & unions, in all forms, period.

3)  Get rid of fractional reserve banking and the entities that promulgate it.

 

By the way, government employees are the literal last bastion of union lunacy, at least in the U.S. I don't think I'm off base to suggest that the average government employee receives from 50% to 200% overcompensation (with a premium benefit package) for the work that they do, not to mention that by any reasonable standards of efficiency/productivity, 80% of government employees could be fired, and few, if any people would see any decline in their standards of living (just the opposite, as the tax structure could then become less onerous).

There are 4 1/2 million federal employees, 15 million state and local government employees, and many millions more stealth government employees, in the U.S. 25 million total government employees, including federal, state, local and "quasi" contractors is probably a conservative number (so, 1 government employee or contractor per 12 Americans is most likely a fair estimate).

Fri, 11/23/2012 - 19:35 | 3007609 CrockettAlmanac.com
CrockettAlmanac.com's picture

Not bad but I'd like it better if you cut it down to this:

 

Forbid government

Fri, 11/23/2012 - 22:41 | 3007951 lasvegaspersona
lasvegaspersona's picture

The people have spoken: they do not want liberty or rule of law or even a system that makes sense. The people want shit, lots of it and they do not want to be confused about the ramifications of getting them their shit. They want a bold leader, who is pretty and kinda tall (se he can 'lead'. He should also be able to make other politicians give them their shit....those who say otherwise are throwbacks to another era, an imaginary time when people understood the system and the law of unintended consequences, a time when .....ah crap...a time that maybe never existed. Maybe it was just something I learned about in grade school that never really was. I just do not believe there has been a change in human nature.

Fri, 11/23/2012 - 23:21 | 3008005 A Nanny Moose
A Nanny Moose's picture

People want shit without having to consider the opportunity costs.

Fri, 11/23/2012 - 23:22 | 3008006 A Nanny Moose
A Nanny Moose's picture

Dupe post.

Fri, 11/23/2012 - 23:38 | 3008022 StychoKiller
StychoKiller's picture

Free Brawndo™ to every Comacho voter...

Fri, 11/23/2012 - 18:13 | 3007440 Yen Cross
Yen Cross's picture

You feel lethargic?( MDB) Sleeping in until the SUN sets, and riding the CHOOM WAGON all night has it's consequences...

Fri, 11/23/2012 - 18:13 | 3007441 alangreedspank
alangreedspank's picture

ROFL as usual MDB, keep on the fine trolling.

Fri, 11/23/2012 - 21:05 | 3007806 Freewheelin Franklin
Freewheelin Franklin's picture

Whatever the job is, I'll do it for 20% less than what you want.

 

Competition sucks, doesn't it?

Sat, 11/24/2012 - 23:43 | 3009344 MeelionDollerBogus
MeelionDollerBogus's picture

Just come out and say it.

It was aliens.

LIBERT-ALIENS.

Fri, 11/23/2012 - 18:01 | 3007410 archon
archon's picture

Hahaha... @ trade unions and Swedish Hoffas and central planners know what's best.   Who is John Galt?

Fri, 11/23/2012 - 19:08 | 3007557 Stoploss
Stoploss's picture

See, the unions have turned labor into a commodity, and use it as the leverage tool they need to get higher wages, when in fact, they should be taking pay cuts.

The cure for high prices, is, high prices..

They are pricing themselves out of business.

Sit back, relax, and enjoy.

Fri, 11/23/2012 - 18:54 | 3007325 ekm
ekm's picture

When are you guys going to believe me when I say that the the central bankers have become simply order takers?

Fri, 11/23/2012 - 17:17 | 3007337 buzzsaw99
buzzsaw99's picture

tethered dog demands longer leash

Fri, 11/23/2012 - 17:19 | 3007340 Bansters-in-my-...
Bansters-in-my- feces's picture

I would piss in that guys mouth before a toilet.

Fri, 11/23/2012 - 18:03 | 3007421 Raymond K Hessel
Raymond K Hessel's picture

Whoa!!!  Off topic, fetish dude!!

Fri, 11/23/2012 - 17:24 | 3007343 THE DORK OF CORK
THE DORK OF CORK's picture

They are in going into the wrong office.

They should really walk into the Swedish treasuary and print Kronabacks.......subtracting from the banks ability to extract wealth....although I gather they extract much wealth from the Baltics which trickle down to the local forest finns ..so better not yet.

 

en.wikipedia.org/wiki/Forest_Finns

 

Fri, 11/23/2012 - 17:30 | 3007366 Uber Vandal
Uber Vandal's picture

Swedish Treasury can not print, due to they went totally cashless.

http://www.cbsnews.com/8301-202_162-57399610/sweden-moving-towards-cashl...

http://www.dailymail.co.uk/news/article-2117643/Sweden-Country-cashless-...

And the fine print of that....

A small but growing number of businesses only take cards, and some bank offices — which make money on electronic transactions — have stopped handling cash altogether.

Fri, 11/23/2012 - 18:11 | 3007433 THE DORK OF CORK
THE DORK OF CORK's picture

Looks like yee are fucked like the rest of us .

 

Banked to debt.

 

Was not a 99% or something bank credit economy enough for these bastards ?

 

Apperently not.

 

They vant it all and they want it now.

They want all your savings in their loans.

We live under or inside a quite incredible system of control.

Fri, 11/23/2012 - 20:42 | 3007755 Matt
Matt's picture

If there is a solar flare and the Internet and electric grid go down, I will be laughing to myself whenever I think of Sweden. "Why could we possibly need physical money?" 

Fri, 11/23/2012 - 17:22 | 3007348 bank guy in Brussels
bank guy in Brussels's picture

Here's is Sweden's austerity committee arriving

From Sweden's greatest film, and one of the greatest movies of all time

Ingmar Bergman's 'The Seventh Seal' 'Sjunde Inseglet' from 1957

The famous scene with the flagellants and the mediaeval Dies Irae 'Day of Wrath' day of judgement tune

http://www.youtube.com/watch?v=YpZsPzBPlEw

Fri, 11/23/2012 - 17:48 | 3007390 MillionDollarBoner_
MillionDollarBoner_'s picture

Hey!

That looks like fun!

Where can I sign up?

"Benny"

Fri, 11/23/2012 - 17:23 | 3007350 falak pema
falak pema's picture

anything the fed can do we can do!

And btW give us more labour union rights! 

Sweden is now the solar star of civilization in spread around wealth. 

Sounds very sexy! 

If the world has to drown in debt it might as well be labour union debt not oligarchy debt! 

debt meets debt on field of templar honour; may judgement by Ordeal prevail ! 

Fri, 11/23/2012 - 17:26 | 3007359 ziggy59
ziggy59's picture

..first cashless, then broke, classic

Fri, 11/23/2012 - 17:42 | 3007382 Sphinx_www
Sphinx_www's picture

And why not? The bernanke is leading the way.

Fri, 11/23/2012 - 17:43 | 3007383 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

I assume by the union head's desire for lower rates that he and his fellow workers do not participate in any type of defined-benefit plan or they fail to understand the unintended consequences of ZIRP on the current and future funding state of their pension plan.

Fri, 11/23/2012 - 18:47 | 3007515 Umh
Umh's picture

or they spend every coin they get immediately and borrow more!

Fri, 11/23/2012 - 17:44 | 3007385 Piranhanoia
Piranhanoia's picture

Pretty good idea if you have money to spend on gold.  

It isn't like they are going to keep their money in the bank at zirp

Fri, 11/23/2012 - 17:47 | 3007389 SilverSavant
SilverSavant's picture

Puck these clueless puckers.   Or in ZH terminolgy, these bitches need more edumacation.  I am passing out for the night.  After seeing silver rise after all this time,  I have gotten drunk.   Maybe it was overdue.

Fri, 11/23/2012 - 17:49 | 3007395 MillionDollarBoner_
MillionDollarBoner_'s picture

Sleep long and well, SS.

It will be down again in the morning ;o)

Fri, 11/23/2012 - 17:49 | 3007394 Atomizer
Atomizer's picture

Chuck Schumer's ‘EBT White Power ‘ plantation movement to the rescue.

 

/sarc

Fri, 11/23/2012 - 17:58 | 3007406 Yen Cross
Yen Cross's picture

 I just sent a friend over to the local coin shop for some rolls of " platinum koalas"... It's good to be, "Metal diversified"...

Fri, 11/23/2012 - 18:00 | 3007409 surf0766
surf0766's picture

Because unions have the answer for everything.. They must be the smartest in the room

 

Sun, 11/25/2012 - 12:04 | 3009730 roadhazard
roadhazard's picture

Not near as smart as Central Bankers and the Rich. Notice They take a Zero pay cut, in fact get a bonus and extra in hard times. Yes, the Unions are killing this world. JHC

Fri, 11/23/2012 - 18:20 | 3007414 zilverreiger
zilverreiger's picture

Jealous american slaves? haha

atleast we europeans get some welfare out of the abuse, you guys get fuck all bahahaha

 

the abused walmart slaves are wisening up luckily

Fri, 11/23/2012 - 21:45 | 3007865 Hangfire
Hangfire's picture

Yes, but you will be forced to convert to Islam 100 years before we are!   

Fri, 11/23/2012 - 18:02 | 3007418 booboo
Fri, 11/23/2012 - 18:12 | 3007438 woggie
woggie's picture

the beast is on the gobble
and all that matters is we're all headed for it's belly
http://youtu.be/ntmthFyaYzY

Fri, 11/23/2012 - 23:42 | 3008030 StychoKiller
StychoKiller's picture

Methinks thou art a spambot!

Fri, 11/23/2012 - 18:57 | 3007534 Maghreb
Maghreb's picture

Swedes are already clued up about whats going on.

A real estate boom ended in a bust. The government took over nearly a quarter of banking assets at a cost of about 4% of the nation's GDP. This was known colloquially as the "Stockholm Solution". The United States Federal Reserve remarked in 2007, that "In the early 1970s, Sweden had one of the highest income levels in Europe; today, its lead has all but disappeared... So, even well-managed financial crises don't really have a happy ending."

More like Stockholm Syndrome.......good to see the Fed are well aware of how things will play out with their "well-managed financial crises".

Sat, 11/24/2012 - 05:58 | 3008197 ThirdWorldDude
ThirdWorldDude's picture

You're spot on, but not many people here in Sweden really understand what's going on.

 

Riksbanken (Swedish CB) is right now in a "damned if you do, damned if you don't" situation. On one side you have unions' talking heads and enterpreneurs howling for lower rates because strong SEK is deterrent to the exports and thus many companies are reducing workforce. On the other side you've got average private indebtedness ratio of 200% of disposable income (owing most of it to the housing bubble) and a completely deregulated banking sector (a major part of the "Stockholm Solution" was removing obligatory installments and today's result is over 60% of indebted households that pay only usury on their loans). 

 

Of course, the best solution for TPTB would be to swiftly legislate obligatory loan amortization, so the CB can keep lowering rates and more slaves can keep their jobs without further feeding the debt bubble, but unfortunately there's neither will nor time for it to happen now. Instead, Riksbanken will lower to 1.00% already in December, allowing the house bubble and overall indebtedness ratio to grow some more (in the process increasing Swedish GDP, which anyways is a joke as it mostly consists of debt) and punishing long-term savers.

 

Add to the mix a society urging to become cashless, with a steadily decreasing M0 (at the moment around, if not below 4%) and you get a pretty good picture. I'm on the sidelines of this crap, with no debt and no bank savings whatsoever, stacking PM's & popcorn and hoping for a good show when the bubble bursts and the bank runs begin...

 

Have a good weekend, bitchez! 

Fri, 11/23/2012 - 19:09 | 3007560 firstdivision
firstdivision's picture

That would cut into the executives bonus and they wouldnt be able to tripple their salary if they're paying everyone a living wage.

Sun, 11/25/2012 - 12:08 | 3009735 roadhazard
roadhazard's picture

Why do you hate the rich, they are people too with hopes and dreams. Back to your cubical, terrorist.

Fri, 11/23/2012 - 19:16 | 3007567 Yen Cross
Yen Cross's picture

 Norway, Sweden>  NOK & SEK, both E.U. contributers. Socialist countries, abiding with Northern European Law...

  Good luck PiI\gS...  Looney Toons...

  Portugal,Ireland, ITALY/ greece, Spain...   ( France?)

Fri, 11/23/2012 - 19:32 | 3007599 q99x2
q99x2's picture

That is an idea. Unions could go after the banksters and seek to redistribute their stolen wealth.

Fri, 11/23/2012 - 19:43 | 3007631 CrockettAlmanac.com
CrockettAlmanac.com's picture

Increasing the rate of the debasement of one's currency is not likely to be a successful way to redistribute wealth from bankers to the little guy.

Fri, 11/23/2012 - 19:43 | 3007629 nmewn
Sat, 11/24/2012 - 08:04 | 3008233 Peterus
Peterus's picture

It's much better to look at spending. http://en.wikipedia.org/wiki/Government_spending They're at 52%... Even if the rest was truly volutnary transactions (and they are severly regulated and influenced) still the State would be controling more than half of all meaningful economic activity.

They could have 15% tax rates and the same level of spending with spread covered in myriad of faux revenues like import taxes, social security like payments etc covered with book-keeping tricks. Also, what about tax breaks and credits?

Fri, 11/23/2012 - 20:00 | 3007660 Urban Redneck
Urban Redneck's picture

If there is wealth to go around Sweden then why not show some SOLIDARITY with their trade union brethren in Greece?

Someone please let the thieving trolls in Brussels know that Sweden is is apparently not paying its fair share.

Fri, 11/23/2012 - 20:30 | 3007728 Hobbleknee
Hobbleknee's picture

Sweden's housing bubble did not pop in 2008 like the rest of the world, but it's popping now.  Swedes are in debt up to their ears with *average* mortgage terms over 200 years.  The average is so high because many Swedes just pay the interest as if it were rent, and never pay off the loan- it's like an infinity mortgage.

70% of the average Swede's income goes to taxes.

Fri, 11/23/2012 - 22:24 | 3007923 Piranha
Piranha's picture

True, house prices are falling slowly

Fri, 11/23/2012 - 21:02 | 3007798 Freewheelin Franklin
Freewheelin Franklin's picture

Pay them in Labor Vouchers, like Ithaca Hours.

Fri, 11/23/2012 - 21:32 | 3007850 Never One Roach
Never One Roach's picture

I preeict more Swedish companies moving to Asia and South America.

Sat, 11/24/2012 - 02:00 | 3008136 Northern Lights
Northern Lights's picture

Swedes are upset?  Say it isn't so.  I heard Swedes were the happiest people on earth.

Hey, who wouldn't be especially if you're a man.  The countries 90% feminized and so far left that men are being forced by law to sit while they take a piss.

My understanding is the average tax rate per person is something like 75%, hence, average take home pay per year after taxes is $15,000 US.

 

Sat, 11/24/2012 - 10:14 | 3008291 orangegeek
orangegeek's picture

We need another new word for PIIGS that includes Sweden, Finland and Norway.  SFNPIIGS - that work?

 

Kramer: Jerry, look how tense you are... You need to take a soak.

Jerry: I'm not taking a soak in that human bacteria frat you got goin' there.

Kramer: Come on, I'm tellin' you, it's great. I opened up all the windows... the air is cold, the

tub is boiling hot... It's like Sweden, man. Sweeeeden!

(Kramer's hot tub)

Sun, 11/25/2012 - 10:23 | 3009626 GMadScientist
GMadScientist's picture

Maybe if they had Bollinger instead of evil tasting Snaps, the white-shoe macareau would take their attempts at game-rigging with more aplomb and stop feeling so damned defensive about their complete punking by socialists.

Tue, 11/27/2012 - 00:23 | 3013500 zerozam
zerozam's picture

Steelmill workers at Swedish Steel AB(SSAB) voted yes to reduced working hours and less pay during crisiis.

http://www.kuriren.nu/nyheter/default.aspx?articleid=6639068

http://www.nsd.se/nyheter/artikel.aspx?ArticleID=7306096

(Links in swedish - use chrome for translation)

 

LO is a weak player for low payed womens job - theyre always following the deals for miners and the other industry unions. Luckily these are still sober and takes responibility: 

Do NOT follow this link or you will be banned from the site!