Wednesday 31 August 2011

HELP! I need somebody!



Albeit recent tentative attempts at liberalisation by the divisive centre-right coalition government, hiring domestic help remains a controversial bone of contention in Swedish politics.

The antipathy towards domestic help is rooted in the Swedish interpretation of egalitarianism, where the relationship between help and employer is assumed to be oppressive and un-democratic.

The opposition percieves this type of contractual relationship to pull society at large back to the days of 19th-century master and servant proto-feudalism when set in the context of individual homes - although professional cleaning and similar services are considered unproblematic within the confines of institutions and corporations.

To ideologically discourage the use of domestic help, steep taxes on domestic labour was in the late 1960's put in place, which immediately created a very large underground market for low-skilled workers.

It's not really like this, is it?
During the 90's the parliament engaged in heated debates on how to address this black-market problem which became known as "The maid-debate" in which proponents of liberalisation generally were painted as unscrupulous cigar-smoking conservatives with little regard for humanistic values. Both status quo and black market was maintained.

During the following decade it was established that the domestic taxation policies pushed actual tax-revenue to the wrong end of the Laffer-curve, and that it would make fiscal sense to relax the prohibitive cost of domestic labour (70% of nothing is still nothing when capital is forced underground).

(At this point I would like to remind non-swedish readers that all this fuss basically comes down to whether people should be allowed to pay market-rates for a professional cleaner or not.)

As lowering labour-taxes would have been political suicide and pounced on as a dismantling of Swedish democracy itself, a subsidy system was introduced through which 50% of domestic labour costs could be claimed back when filing the annual tax-return.

Albeit administratively cumbersome and somewhat back-handed, the reform proved immensely popular, with legal home improvements surging as a result.

I have never seen so many new-built wooden patio decks as when
I visited post-reform Sweden!

To put things into perspective, this blogger has found the post claim-back monthly rates for 10 hours of professional domestic cleaning to clock in at around £350 which by most standards would be considered uncompetitively high. (If you know where to find a better deal, you know where the comments section is!)

Those coming out against the reform generally cite "subsidizing the rich" as a key argument. Practically, subsidies that reward certain sectors of the economy unfairly should indeed, in the opinion of this blog, be discarded in favour of a general and equal lowering of tax on labour. Loss of short-term labour-tax revenues can easily be mitigated with increased overall tax-returns from turning black markets white, and possibly by adjusted green taxes on consumption.

As the debate (if not a storm in a teacup, perhaps in a kettle) lingers, with the moral fibre of procurers of domestic labour in question, the epitome of the conflict might concern professional nannies, as I unwittingly came to experience when jollily asking around on where to find one.

If paying for housework in Sweden is understood as morally objectionable, then paying for an extra pair of hands to help out with the children is by some perceived as positively evil: if you love your children, you take care of them yourself at all times (although using friends, grandparents and council-run daycare is fine) - hire a helper and you should not have bothered starting a family in the first place.
In this context, reason-based arguments of personal circumstances are of little consequence and generally dismissed as irrelevant at best and improper at worst.

All this is made the more absurd considering Sweden's high unemployment figures for youth and the low-skilled. In the apparent discrepancy between ideological conviction and the practical socio-economic situation, it would seem ideology is besting the desperate need for a simple entry for low-skilled onto the taxable labour-market.
Instead much wealth has been squandered on job-coaches and expensive career-preparation programmes of frivolous utility. Thread lightly if you are to question this order of things!

In the UK, hiring help is completely unproblematic. There is no moral stigma attached to a process which during periods of the life of an ordinary family is practical and normal. We have had both a cleaner, a nanny and for a time a night-nurse to help us with our then new-born twins. A decent cleaner will in central London run you between £20 and £30 per week and we have had a wonderful relationship with our nanny who is supplementing her income to get through university. We ended up paying her around £100 per week and negotiated a flexible relationship that would work with both her schedule and ours on a week-by-week basis.


It should be duly noted that my wife also worked as a London nanny during the years in which she was completing her education - had it not been for the opportunity to do this the remaining options would have been going into debt or dropping out. The notion of "relative poverty" and the subsequent political desire to regulate everyone into becoming white-collar workers is as absurd as it is destructive. By making it difficult or impossible for the low-skilled and inexperienced to offer their services at competitive prices, income levels are not improved - instead it tells people "if you are less skilled than this, you can't work."


It needs to be established that doing domestic labour rarely is the final destination for most people, but rather a gateway to supplement income and gain first entry to the labour-market. The brilliant Polish handy-men who swamped London in 2005 have not only made the 2012 olympics at all possible, but they have also risen from DIY-cowboys to form large companies in the construction and infra-structure sectors, companies that now employ thousands of people and bring handsome tax-revenue for the HMRC.

There has been none of the Swedish implied coercion in the professional relationship between us as employers and our help. Rates are negotiated in person and to a level that is sustainable and add value for both parties. In fact, we are still in touch with our nanny on a friendly basis and might well ask to bring her along with us on
our next long-term soujour in the states next spring.

As for nannies, I find the sanctimonious swedish stance quite unbecoming for a people so concerned with not being coercive, and it will have to suffice to say that equality does not mean sameness: an individual cannot second-guess the situation of a fellow citizen by sight and demand conformism on the mere assumption that what works for me should also work for you.

Sweden:
- High tax on labour and heavy-handed minimum-wage-laws keep the
unskilled from entering the labour market and gaining skills
- Sanctimonious and judgmental attitudes to non-conformist lifestyle choices
+ The back-handed claim-back scheme for domestic labour is a step in
the right direction

UK:
+ Easy to find and hire people
+ Non-judgemental attitude to individual lifestyle choices
+ Competitive labour market sees low-skilled and immigrants forming
companies and successfully integrating into the economy

Winner:
The UK wins hands down and makes Sweden feel like a highly-strung
christian version of the DDR.

3 comments:

  1. You probably cannot change the Swedish domestic labor laws by reason alone. One way to liberalize rates and taxes on nannies is to relate them to increase in birthrates.

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  2. Very interesting reading! As you may know, the Swedish ideology is no class-system and everyone should be equal. However, it is not possible in the real life as we already noticed with the crash of the communism in Russia and other east-block countries. Furthermore, I totally agree to that the neighbours give you evil eyes if one hire a nanny or a maid.

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  3. Thanks for your comments!

    KFZF: I would agree that a general liberalization of Swedish labour-law would be helpful.

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