The Swedish Model: The labour market in the 20th Century

Question 1

Characteristics of the Swedish labour market

Answer 1

• Based on cooperation between employers and unions
• Little interference from the state
• Collective bargaining
• Peaceful resolution of labor market conflicts

Question 2

Employment in different sectors

Answer 2

• agriculture: high starting point - decrease contantly from 1880- 2000
• Industry and construction: low starting point in 1880 - increase until 1960 - after 1960 decrease
• Services: low starting point in 1880- contanst increase until 1960- after 1960 strong increase

Question 3

Consequences of industrialisation

Answer 3

• Pessimistic perspective: unhealthy, low wages and moral deprivation
• Optimistic perspective: new freer lifestyle possible, rising living
  standards
• Class consciousness emerged

Question 4

The function of unions

Answer 4

• Collective action
• Limits supply of labor
• Open cartels

Question 5

Conflicts and first steps to cooperation

Answer 5

• Conflicts over power in the workplace, the right to organize, working hours and wages
• The ”December compromise” in 1906
  – **§23 (later§ 32 in Saltsjöbaden agreement): **
  Employers’ rights to freely employ and dismiss
  workers, to manage and distribute work and to
  employ workers from any association or workers
  standing outside an association.
• The general strike in 1909
• Continued turbulence in the interwar period

Number of industrial conflicts: 1919-24: 60 –> 1925-29: 33

Question 6

Troubled 1970s

Answer 6

• End of postwar growth
• Increased discontent (Unzufriedenheit) with effects of
  rationalizations
• Industries with high wages in trouble (e.g. steel, shipyards), cf. low-wage industries that had disappeared earlier (mainly textile sector dominated by women employees)

Question 7

Deteriorating relations on the labor market

Deteriorating = Verschlechterung

Answer 7

• Radicalization of demands, workers pushed for legislation (e.g. LAS –Employment Protection Act and MBL –Codetermination Act)
• Central agreement between SAF/LO ended in 1979, large general strike in May 1980 (Storkonflikten)
• Start of a period with negotiations that were more industry-specific and wage negotiations that were decentralized

Question 8

The public sector

Answer 8

• In early 1970s: public sector employment was dominated by health care and education
• From 1970s: growth of public child care services
• Women were increasingly employed in the public sector –
  this change demanded that the unpaid household work was taken care of by someone else
• Regional policy

Question 9

Globalisation and new technology

for context

Answer 9

• Globalization since mid 1980s:
  – Free flow of capital
  – But heavily restricted movements of labor (cf.
  late 1800s)
• Deep economic crisis in early 1990s
• Sweden joins EU in 1995
• ”Third industrial revolution” based on electronics, microprocessors

Question 10

Developments since 1990s

Answer 10

• The labor market:
  – Permanently higher unemployment since the crisis of 1990s
  – Less centralization of wage
  negotiations
• But, persistence in high union and collective agreement coverage
• Labor market regulations remain mostly intact (e.g. LAS and MBL)
• But heated debate and threat of legislation in relation to LAS 2020s

Question 11

Broader economic and political changes

Answer 11

• Continued expansion of employment in service sectors
• Further automation in industry, fewer low-skilled jobs in industry
• But also possibilities for new areas of economic growth based on the electronic revolution and increased human capital and knowledge development
• Areas of retrenchment (Einschränkungen) include: unemployment insurance
• Taxes and social expenditure not changed that much
• Universalism mostly maintained
• Liberalization without retrenchment?