Swedish Collective Bargaining Under Pressure: Inter‐union Rivalry and Incomes Policies
| Author | Kristina Ahlén |
| Published date | 01 November 1989 |
| DOI | http://doi.org/10.1111/j.1467-8543.1989.tb00343.x |
| Date | 01 November 1989 |
British Journal
of
Industrial Relations
27:3
November
1989
0007-1080
$3.00
Swedish Collective
Bargaining
Under Pressure:
I
nter-u
n
ion
Riva
I
ry
and
Incomes Policies
Kristina
Ahlen
*
Collective bargaining has undergone major changes in Sweden during the
past several years. Fundamental shifts
in
the labour market, in labour
organisations and
in
the
Swedish economy generally have combined to
disrupt the original orderly, well-functioning Swedish Model. In its place has
emerged a chaotic system, sometimes echoing the past model, but often
mocking
it.
Although the overall balance of power between labour and
capital may seem unchanged, bargaining patterns
of
the
1980s
are bound
eventually
to
diminish labour
if
they cannot be macroeconomically con-
trolled.
1.
THE SWEDISH MODEL
The system that once made Sweden the envy of unionists and employers
throughout the world emerged
in
the aftermath of the Second World War.
The co-operative spirit underlying this system had been made explicit as
early as
1938
with the Saltsjobaden Agreement between the Swedish
Confederation
of
Trade Unions
(LO)
and the Swedish Employers Federa-
tion
(SA),
which set out procedures
for
settling disputes. The guiding
principles
of
the system were contained in the Rehn-Meidner model for
setting fiscal, wage and labour market policy. The model, designed by union
economists in the early
1950s,
aimed
to
ensure
full
employment, low
inflation, rapid structural change and steady economic growth. What made
it distinctive in an international perspective was the unionists' explicit
consideration
of
wider economic issues than simply higher pay scales for
workers. In addition to various economic and labour market policies, an
essential ingredient of the model was the wage solidarity policy. Workers
were to receive equal pay for equal work, regardless
of
the industry
or
the
firm's profitability. The aim was
to
restrain inter-union wage rivalry and
to
promote structural change by squeezing profits.
"Research Director. Swedish Centre
for
Working
Life,
Stockholm
Swedish Collective Bargaining Under Pressure
33
1
What made the model possible were a number
of
unusual characteristics.
Chief among these was a
highly centrafised collective bargaining
system that
guaranteed adherence to the principles of the Rehn-Meidner model. During
the first two postwar decades, this referred chiefly to central negotiations
between the LO and
SAF.
These two bodies determined the overall wage
developments for private-sector industrial workers. Unions and employers
outside the two confederations, representing white-collar and professional
sectors, followed the lead
of
the LO-SAF settlement. The system was made
especially effective by the remarkably
high rate
of
unionisation and employer
organisation.
LO represents some
90
per cent of Swedish blue-collar
workers;
SAF
represents
40,000
firms in private industry, including all of the
largest firms. To this extraordinary degree
of
organisational coherence was
added the Swedish spirit
of
co-operation and
consensual bargaining
running
through the entire labour relations system. Labour conflict was relatively
rare. Thus, the Swedish Model was a combination
of
an unusual labour
relations system with a sophisticated bargaining approach founded
on
macroeconomic concerns. It proved
to
be a successful alternative to the
common problematic choice between high inflation and high unemploy-
ment.
2.
DISINTEGRATION OF THE MODEL
Basic Structural Change in the Labour Markel
Throughout the heyday
of
the Swedish Model, in the
1950s
and
1960s,
there
existed an undertow
of
forces which eventually undermined the whole
framework.
A
primary force was the restructuring of the labour market
itself. The Swedish Model had been formulated and applied when industrial
work dominated the labour market. It worked because wage developments
throughout the labour market were based at least partly
on
the profits from
internationally competing firms. This was essential in a small, trade-
dependent nation
like
Sweden, where costs had to stay comparable with
those in competing nations. But even during the
1950s
and
1960s,
the service
sector was expanding relentlessly. From employing
40
per cent
of
Swedish
workers
in
1950,
it
was by
1970
employing over half. Today two-thirds of all
Swedish workers are
in
services. The proportion of workers
in
the
industrial
export industry has shrunk to under one-fifth.
End
of
Dominance
of
the
LO-SAF
Axis
These developments had a number of consequences. With
the
expansion of
services, especially public sector services, came the rise
in
prominence
of
public-sector and white-collar unions. They were
to
be found in all three
union confederations: the
LO,
the white-collar workers’
TCO
(Swedish
Confederation of Professional Employees, previously the Central Organisa-
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