CENTRAL WAGE NEGOTIATION IN SWEDEN: RECENT PROBLEMS AND DEVELOPMENTS
| Date | 01 November 1967 |
| Author | StevenD. Anderman |
| Published date | 01 November 1967 |
| DOI | http://doi.org/10.1111/j.1467-8543.1967.tb00516.x |
CENTRA4L WAGE NEGOTIATIOX
1-1;
SIVEDEN
:
RECENT
PROBLEMS
AND DEVELOPMENTS
STEVEN
D.
ANDERMAN*‘
CENTRAL
wage negotiation has been a continuous feature of the Swedish
system of industrial relations for more than
a
decade. Since
1956
the Con-
federation of Swedish Trade Unions
(L.O.)
and the Swedish Employers’
Confederation
(S.A.F.)
have attempted to regulate the movement of the
wage level and mould the wage structure through central agreements
setting out a cost framework for negotiation at the industry-wide level.
For most of its course, central wage bargaining has coincided with
favourable trends in the Swedish labour market and economy. From
1956
to
1964
it was possible to combine a high rate ofincrease
of
wages with
industrial peace, full employment, rapid economic growth and a favourable
balance of foreign trade. During this period there were
a
number of prob-
lems associated with the negotiation of central agreements, notably a high
and uneven incidence of wage drift and rising prices. But in general the two
central organizations had achieved a
modus
operandi
that was acceptable in
terms of their own interests and posed no direct threat to economic stability.
Recent events, however, have combined to lessen the acceptability of
existing central wage bargaining procedures and methods. For the first
time in a long while there has been deterioration in Sweden’s foreign trade
balance and export performance.
As
well, there has been a noticeable disen-
chantment among trade unionists with the solidaristic wage policy pursued
in the central agreements. These events have prompted
a
fairly widespread
recognition in Sweden of the need to reform the central wage bargaining
machinery.
In response to these developments, S.A.F. has recently put forward
a
proposal for comprehensively reorganizing the procedures and methods of
central wage negotiation. Its suggestions will be the starting point for a
round of discussion and negotiation during the coming year. The purpose
of this article is to describe the new
S.A.F.
proposal in the light ofpreceding
developments in central wage bargaining in Sweden.
DEVELOPMENT
OF
CENTRAL WAGE NEGOTIATION
After an experimental introduction in
1952
and a rather tentative re-
sumptionin
1956,l
central wage bargaining has become a regular feature of
*
Staff Tutor in Industrial Relations, University
of
Oxford, Delegacy for Extra-Mural Studies.
T.
L.
Johnston,
Collective
Barpining
in
Sweden
(George Allen
8r
c‘nwin,
London,
1962).
pp.
283
ff
322
CENTRAL
WAGE
NEGOTIATION
IN
SWEDEN
:
RECENT
PROBLEMS
323
wage determination in Sweden. Framework agreements between
S.A.F.
and
LO.,
setting forth the size of the annual global wage increase for indus-
trial workers
as
well as the method
of
allocating this overall increase among
the various industries, have been negotiated for 1957-58, 1959, 1960-61
,
1962-63, 1964-65 and 1966-69.
Although central wage negotiation has thus enjoyed a long period of
tenure, there has been little continuity in the procedures used
to
combine
wage bargaining
at
the
S.
A.F.-L.O. level with industry-wide
and
plant-wide
negotiations. Admittedly, the timetables of most bargaining rounds have
been similar
in
appearance. The S.A.F.-L.O. negotiations have generally
extended from the summer of one year to March and April of the following
year. And the same processes
of
public statement of demands, consultation
with member organisations and economic reports have tended
to
repeat
themselves.2 Moreover, it
is
true that the framework agreements, despite
their formal status as recommendations, have invariably been applied by
the
L.O.
member unions and
S.A.F.
employer associations
in
the industry-
wide
agreement^.^
But though the form of central wage bargaining has
been similar
in
these respects, there have been significant variations in the
actual negotiating procedures. Thus in certain years bargaining
at
the
central level has preceded the industry-wide and plant-wide negotiations.
In other years, industry-wide bargaining has preceded the
S.A.F.-L.O.
negotiations. And in several rounds, claims have been put forward at all
three levels simultaneously. Choice
of
timing and level
of
negotiation have
tended to become important tactics in the bargaining process, inevitably
resulting in
a
strong element
of
unpredictability in the sequence of nego-
tiations
at
different levels in any one round.4
There has been a similar element of the
ad
hoc
in the methods of calcu-
lating the amount
of
the overall increase and the way in which this increase
TABLE
1
Central Wage Recommendations in Sweden, 1956-1968
1956 1957 1958 1959 1960
1961
196-3 1963 1964 1965 1966 196.7 1968
Hourly
3.7(,?'
20&
3.59;
2";
18
19
19
16
8
26
20
14
Paid
or or
ore ore ore ore ore ore ore ore
Workers 16
10
+
2.5
+9
ore ore
ore
ore
Workers
3-70;,
2y;
2'1;
1.5",',
3',!,,
30/6
2.75''"
2.25",,
3
3",,
min. min. min.
Paid
by
or
or
(or
(or
(or
(or
ore
or
27 27 27
Results
16
10
min. mm. min.
14
+2-5 24 ore ore ore
ore) ore) ore)
ore ore
16
16 17
ore
ore
ore
Source:
Central Wage Agreements.
a
Johnston,
op.
tit.,
p.
264;
see also
J.
Mouly, 'Wages Policy in Sweden',
Znlernatwnal
Lubour
For
an
explanation of the reasons why the central directives are generally followed
in
prac-
Review,
Vol.
95,
No.
3,
March
1967,
pp.
168,
ff
tice
see
Mouly,
OF.
czt.,
p.
171
Indeed, the very practice of central wage bargaining is subject
to
approval before each round.
Owing to its constitutional limitations,
L.O.
must obtain the consent ofits members
to
negotiate a
central agreement with
S.A.F.
See
K.
0.
Faxtn, 'Incomes Policy in Sweden: Problems and
I>evelopments',
British Journal
of
Industrial
Relations,
November 1964, p.
346
-
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