For the last two years, the Swedish Trade Union Confederation (LO) has called for regulations to drastically reduce the profits companies that run the country's hospitals, schools, and care homes are allowed to earn.
But on Monday, LO's vice chair Tobias Baudin signaled that, rather than regulation, it preferred to see an agreement on welfare sector profits forged via negotiations between workers and employers in the sector.
"We'd like to find a Swedish model for creating a sense of order in the welfare sector, where (labour market) partners can work together," Baudin told the Dagens Nyheter (DN) newspaper, referring to Sweden's consensus model of labour relations that has kept the country more or less free from violent labour disputes for decades.
"We've shifted the debate in Swedish politics about welfare and profits. But in reality nothing has happened. I'm concerned over the risk that we end up with a patchwork of different political proposals. We're at risk for getting a number of populist proposals that don't change anything."
A better approach, Baudin argued, involves a dialogue between unions and employer groups in the welfare sector that could lead to an agreed set of rules on what sort of profits are reasonable.
LO is in favour of companies in the welfare sector turning a profit, but would like to see most of money reinvested in the form of higher salaries and professional development for workers in the welfare sector.
"It shouldn't be possible to pay dividends if quality isn't high enough. If you don't have enough money to maintain high standards for a school or a care home, you shouldn't be able to take out profits," Baudin told the TT news agency.
Part of LO's proposal includes taking quality measures such as staffing and education levels into account.
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"Then I think it's important to find specific quality standards in different sectors," Baudin said, adding that he hopes LO's change of heart will lead to real progress on the issue.
"I think the chaos in the welfare sector today is harmful. Not least because it hurts the legitimacy of Sweden's welfare state and affects people's willingness to pay taxes," he said.
"One should always feel that 'my money goes to schools and healthcare where it's cared for in a way that increases quality for me as a user of welfare'."