The Moderates have been talking for a year or so about wanting to introduce a cap on how much income a household receiving income support and/or establishment allowance can receive in total contributions. Who knows what spillover effect this could have so that even those receiving unemployment benefits, sickness benefits or sickness compensation might be included in the future.
This is based on the citizens' official job creation and growth hypothesis that you have to starve people in order for new jobs to be created and growth to increase. Nevertheless, the increase in productivity in the Swedish economy stopped around the year 2007. This increase in productivity is about how much more efficiently we work each year. Since it is difficult for a human to work, for a student to listen to the teacher or for a patient to heal faster, increasing productivity is often about automation, robotization and more efficient organizations. This is driven by the fact that labor is kept expensive and reasonably difficult to flirt with, so that the employer is stimulated to automate and improve working conditions.
(The citizens' unofficial intention with the deterioration of social insurance and contributions and the introduction of the earned income tax credits was in fact to lower the rate of wage growth by making particularly low-paid workers more desperate for jobs. This is shown by internal, secret moderate party documents leaked during the Alliance government.)
2007, when productivity growth stopped in Sweden, was probably around the same time that the Alliance's deterioration of social insurance began to take effect.
Of course, there are a few who are a little unwilling to work, but if the wages and working conditions are reasonable, most jobseekers quickly leave the poor and psychologically stressful idleness for an income-generating job. The few unwilling to work can be forced into work with more scrutiny, albeit a benevolent one, from the employment agencies or, in the worst case, with the threat of withdrawn unemployment insurance.
What actually drives job creation and economic growth is if there is a large demand for Swedish companies' products and services, and this is largely controlled by whether even low-income earners can afford to shop.
Economists therefore speak of generous contributions and social insurance, especially in our times of mass unemployment as a result of decades of powerful automation and streamlining, as automatic economic stabilizers. The generous allowances mean that purchasing power does not fall too low during temporary economic downturns.
Generous and equally eligible welfare support and generous, income-related social insurance are important for the economy to function during recessions and financial crises. If the middle class is not covered by these, the solidarity of the middle class easily falls away from the needs of the poor. And if the needs of the poor are not met, economic downturns will be sharper and growth will be lower.
Benefit caps are dangerous because they deplete the purchasing power of low- and middle-income earners, which is what drives the economy and employment.
Also read this: Occupational restrictions in job searches are also good for the middle class