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Sweden enjoys domestic cleaning boom27th of April 2012
Correspondent Petra Sjouwerman reports from Sweden, where a controversial tax deduction has had a huge influence on the cleaning sector.
The cleaning industry is one of the fastest growing industrial sectors in Sweden. Since 2007 the number of people employed in this sector has increased by 24 per cent - a development that has been hugely influenced by a tax deduction in the industry.
In 2007 the Swedish centre-right government introduced a tax break allowing Swedes to deduct from their tax bill half the cost of household services such as cleaning, cooking, lawn mowing, snow shovelling and babysitting. That tax deduction has created 7,000 jobs and encouraged a previously informal sector to become formal, thus generating taxes. A win-win situation, one might think. But in Sweden the tax break has been highly controversial. The opposition parties - the Social Democrats and the Left Party - claim that the tax break is regressive and class-bound.
According to these politicians mainly wealthy Swedes make use of these subsidised services.
"That is not correct at all," says Monica Linstedt, founder of Hemfrid in Stockholm, one of the market leaders in the home services industry. "Our customers are mainly dual income families with small children. They are mostly middle class families, who simply lack time," she says.
Hemfrid - which means peace at home - was founded in 1996. At the time Linstedt started the business to solve her own problems. As a successful businesswoman and mother to four children she lacked time to do the household chores. The company had already become a major success story before the introduction of the tax break. Since 2007, however, the company has grown more rapidly, from 16-17 per cent annually to 30 per cent annually.
Hemfrid now has establishments in five cities and 1,300 employees. These are mostly women between 18 and 70. The older employees are typically women who have re-entered the labour market after their retirement, a fairly common phenomenon in Sweden. They don’t do the cleaning, but they cook and babysit.
Different polls have shown that a majority of Swedes are in favour of the tax deduction as it allows parents in dual income families - in fact most families in Sweden - to spend more time with their children during the week and at the weekends. Others argue that the tax break has created jobs for marginalised groups, primarily immigrant women, who might otherwise struggle to gain a foothold on the labour market.
Indeed, half of Hemfrid's employees were born outside of Sweden. And for the 950 new companies established in the cleaning industry in 2010, women who were not born in Sweden account for nearly 40 per cent of these firms' employees.
The black market for cleaning has not disappeared in Sweden, but a recent study has shown that it is rapidly declining. "And it is very interesting to see that mentalities are changing. In people’s minds it is not okay anymore to buy these services on the black market," concluded Monica Linstedt.