An odd couple: individual wage setting and the largest Swedish trade union

Abstract

The demise of the solidaristic wage policy, followed by the introduction of individual wage setting, is one of many similar changes in the Swedish welfare regime in recent decades. These changes were often demanded by employers and then eventually accepted and implemented by parts of the labour movement, i.e. Social Democracy and its related trade unions. Ever since its introduction in 1993, however, individual wage setting has created much controversy within Kommunal (the Swedish Municipal Workers' Union), the largest trade union in Sweden. In this light, it is interesting to examine the arguments that convinced a majority of the delegates at the decision-making congresses. Two main arguments in favour of individual wage setting have been put forward by union leaders, namely that the new wage system is appreciated by members and that increased wage dispersion increases productivity, which in turn leads to higher wages. This article reviews these arguments. It is found that member surveys suffer from flaws in methodology and that the productivity argument is ill-founded. The reason for the insistence on individual wage setting must be sought elsewhere.

Keywords::

• trade unions contemporary
• incomes policies
• productivity
• Swedish model

Acknowledgements

This article is written within the research project “Swedish wages in comparative perspective 1860–2000”. The author would like to thank the Jan Wallander and Tom Hedelius Foundation for financial support. The author would like to thank two anonymous referees for helpful comments and suggestions.

Notes

^1.Giddens, Third Way.

^2.Klitgaard, “Why Are They Doing It?”; and Bergh, “Explaining the Survival”.

^3.Esping-Andersen, Three Worlds.

^4. For example Kitschelt, Transformation of European Social Democracy, 3: “From the early 1980s to the early 1990s, socialist, social democratic, and labor ideologies underwent more change than in any decade since World War II”.

^5.Svallfors, Välfärdsstatens moraliska ekonomi; and Svallfors, “Bedrock of Support?”.

^6.Bacarro and Howell, “Common Neoliberal Trajectory”.

^7.Streeck and Thelen, Beyond Continuity; and Hacker, “Privatizing Risk”.

^8.Ross, “Beyond Left and Right”.

^9.Kommunal, Våra löner. Vår framtid, 63.

^10.Pontusson and Swenson, “Labor Markets,” 224.

^11.Giddens, Third Way; and Kitschelt, Transformation of European Social Democracy.

^12. For example Garrett, Partisan Politics; Nilsson and Nyström, Den sociala demokratins; and Ryner, “Neo-Liberalization of Social Democracy”.

^13.Bacarro and Howell, “Common Neoliberal Trajectory,” 522.

^14. SOU 1981:44, Löntagarna och kapitaltillväxten, 133.

^15.LO, Lönepolitik.

^16.Elvander, Den svenska modellen, 39.

^17.Nilsson and Nyström, Den sociala demokratins, 135.

^18. Ibid, 138.

^19.Elvander, Den svenska modellen, 87.

^20.Bacarro and Howell, “Common Neoliberal Trajectory,” 544; and Albrecht, Björklund, and Vroman, “Unionization and the Evolution,” 1042.

^21.Lundh, Spelets regler, 269.

^22.Strandås, Lön för mödan?.

^23.Svenskt Näringsliv, Strukturrapport, 110.

^24.Strandås, Lön för mödan?, 62.

^25. For example Kommunal, Bättre betalt, 27; and Asklöf, På färd mot framtiden, 12.

^26.Karlsson, “Varför decentraliseras,” 60; and Nilsson and Ryman, Individuell lön, 73.

^27.Strandås, Lön för mödan?, 54

^28. For example Kommunal, Rätt lön – lönepolitiska utredningen, 30

^29.Nilsson and Nyström, Den sociala demokratins, 143; and Waldemarsson, Mellan individ och kollektiv.

^30.Asklöf, På färd mot framtiden.

^31.Östman, Lönepolitik.

^32.Kommunal, Rätt lön – lönepolitiska utredningen, 48.

^33.Öberg, Individuell lön, 17.

^34.Kommunal, Motioner och utlåtanden, 52–67.

^35. Ibid, 65.

^36.Nilsson and Ryman, Individuell lön, 62.

^37. The example is inspired by Kurt Junesjö.

^38.Kommunal, Rätt lön – lönepolitiska utredningen, 31–32.

^39.Kommunal, Rätt lön – återblick, 46.

^40. Ibid, 52.

^41.Kommunal, Bättre betalt, 35.

^42.Åmark, Sammanhållning och intressepolitik, 78; and Nilsson and Nyström, Den sociala demokratins, 147.

^43. For example Bengtsson, Individen stämplar in, 157.

^44.Svenskt Näringsliv, Strukturrapport, 114.

^45.Kommunal, Rätt lön – lönepolitiska utredningen, 27.

^46.Kommunal, Våra löner. Vår framtid, for example 8 and 62.

^47.Wallenberg, Kommunals medlemmars syn, 10.

^48.Wallenberg, Löner och arbetsplatsförhållanden; Wallenberg, Hur ser Kommunals medlemmar; and Wallenberg, Kommunals medlemmars syn.

^49.Wallenberg, Kommunals medlemmars syn, 10.

^50.Brüggen and Dholakia, “Determinants of Participation”.

^51. Ibid, 247; and Spitzmüller et al., “If you Treat me Right,” 22.

^52.Wallenberg, Kommunals medlemmars syn, 4.

^53.Carlsson and Wallenberg, Lön – motivation – arbetsresultat, 2.

^54.Esaiasson et al., Metodpraktikan, 277.

^55. Ibid, 275.

^56.Wärneryd, Att fråga, 65.

^57.Alsterdal and Wallenberg, Individuell lön i praktiken, 104.

^58. SOU 2008:105, Långtidsutredningen, 177.

^59.Baumol, The cost disease.

^60.Kommunal, Våra löner. Vår framtid, 50.

^61.Kommunal, Rätt lön – lönepolitiska utredningen, 49.

^62. The following rests for example on Deci, Intrinsic Motivation; Kohn, No Contest; and Kohn, “Why Incentive Plans Cannot Work”.

^63.Kohn, No Contest, 62.

^64. Ibid, 61.

^65. See for example Lallemand, Plasman, and Rycx, “Intra-Firm Wage Dispersion”; and Heyman, Sambandet mellan lönespridning.

^66.Lallemand, Plasman, and Rycx, “Intra-Firm Wage Dispersion,” 543.

^67.Kommunal, Våra löner. Vår framtid, 7; Asklöf, På färd mot framtiden, 6; and Kommunal, Bättre betalt, 30.

^68.Kommunal, Våra löner. Vår framtid, 38–51.

Additional information

Funding

This work was supported by the “Jan Wallander and Tom Hedelius Foundation”, [grant number P2011-0182:1].

Notes on contributors

John Lapidus

John Lapidus is a PhD student in Economic History at University of Gothenburg, Sweden. His research interests include perspectives on the decline of the Swedish model.