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Is the Swedish Model the fairest of them all?

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Is the Swedish Model the fairest of them all?
A Swedish model (L) and the 1938 birth of the Swedish Model. File photos: TT
08:04 CET+01:00
A lot of people talk about the Swedish Model, but what is it really? The Local trains its eyes on one of the hallmarks of the Swedish labour market, and the bloodshed from which it was born.

Say "Swedish model" and for some, an image of Carolina Winberg may come to mind. For others, the term conjures up visions of high taxes and a strong welfare state.

While both associations for "Swedish model" are certainly valid, the term stems from a consensus-approach to labour market relations that has kept Sweden more or less free of violent labour disputes for decades. 

"I've met people abroad who think Swedish workers have an enormous amount of power and that everyone on the factory floor is rich," says Eric Rosén, editor-in-chief of Politism.se, an opinion and news website co-owned by the Aftonbladet newspaper and the Swedish Trade Union Confederation (LO).

"And while that's a fallacy, that perception is proof of how the Swedish Model has benefited employees."

After a bloody conflict between workers and the Swedish military in 1931, and a failed attempt by the Social Democrat-led government to pass a law regulating industrial action, employers and employees started moving toward the new system of labour relations that would eventually be dubbed the Swedish Model.

The model's cornerstone is the Saltsjöbaden agreement of 1938, which kept the state out of direct negotiations, and instead made sure employers organizations and trade unions met as equal partners to discuss wages and conditions. 

"Since then we have had relatively few conflicts; we don't strike left and right," Rosén explains. "Not like the French."

Today, the major players responsible for making the Swedish Model work include blue-collar union group LO, the white-collar Confederation for Professional Employees (TCO), and the Confederation of Swedish Enterprise (Svenskt näringsliv), Sweden's main employer organization. Representatives from both sides meet regularly in order to maintain the "spirit of Saltsjöbaden" (saltsjöbadsandan), which, in the words of the Confederation of Swedish Enterprise, is "characterized by mutual trust, a willingness to cooperate and a joint belief in combining economic growth with income equalization".

According to LO, about 70 percent of all employees in Sweden currently belong to a trade union, and 90 percent are covered by some form of collective wage agreement. Employment conditions are hammered out by unions and employers' groups at industry sector level; all told, some 650 collective agreements exist on the Swedish labour market. And if a collective agreement is in place at a given workplace, all workers are covered by the conditions laid out in the agreement, regardless of whether or not they are members of a union.

IN PICTURES: Blood and bread: a short history of the Swedish Model

Another feature of the Swedish Model is the lack of a statutory minimum wage and laws regulating the labour market. Coupled with Sweden's high-level of union membership, this means unions and employer organizations have a lot of autonomy and flexibility in negotiating agreements that suit each industrial sector.

Of course, disputes still flare up, but when they do, they are generally dealt with in an orderly fashion, according to the rules first laid out back in 1938. Indeed, the pervasive "spirit of Saltsjöbaden" stipulates that both sides are obligated to maintain industrial peace as long as a previously agreed contract is in effect.

"During negotiations for a new agreement industrial action is allowed," LO explains. However, any strike needs to be pre-approved by a trade union, and workers must also give employers fair warning before walking out.

And while the state isn't involved as a negotiating party, it does often have a seat at the table through mediators provided by the National Mediation Office (Medlingsinstitutet), who do their best to help overcome disputes without the need for a strike, or anything close to the violence of the 1930s that led both sides to the table. Nowadays, relatively few working days are lost to strikes each year in Sweden, although widespread walkouts, like the nurses strike of 2008, do occur on occasion. 

Indeed, with its 75th birthday fast approaching (the Saltsjöbaden Agreement was signed on December 20th, 1938), the Swedish Model is still looking pretty good, with representatives from unions and employer groups in agreement that its spirit of dialogue and compromise has helped buoy the Swedish economy through difficult times, and will continue to do so into the foreseeable future.

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