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Hand out definitions
Atlapedia and Labourstart
What did you find interesting or different in the reading about the Swedish system
Unions and employers take responsibility for pay determination and industrial peace Government is responsible for maintaining economic stability and full employment
Corporatism - define
Population of 9 million 2005
Smallest country in the course
Parliamentary Democracy and Monarchy
King Carl Gustaf since 1973
1 house Parliament - proportional representation
Social Democratic Party (SAP)
Socialist and a labor party
Ruled 1932-76 and all but 9 years since. 
1994 to present minority government.  Q- What is minority government? 
2002 won 40% of vote and 144 seats (of 349) for third consecutive victory
Prime Minister Goran Persson
Center – rural party – 2002 6%
Liberal – 2002 – 13% (last time only 5%)
Second largest party – 2002 promised tax cuts and vote fell from 23% to 15%
Three major parties usually in coalition
Formed coalition government 1976-82.  1991-94 minority coalition government with Moderate Prime Minister
Christian Democrats
Sometimes in coalition with other three conservative parties
2002 9%
Left Party
Formerly Communist
Did very well 1998 becoming third largest with 12% but 2002 down to 8%
Greens 2002 5%
Politically‑ very stable system ‑
at least until Palme assassination, 1986, never solved
On corruption index, least corrupt in course and one of least corrupt in world
Voting patterns quite class based
80% Working class votes for SAP or Left Party
80% Business people vote for non-socialists
Middle class decides outcomes
GDP per capita
2002 higher than France, Italy, Germany in course
Human Development Index would rank Sweden highest in course because of high literacy, low infant mortality
Well‑endowed with natural resources
Especially timber, iron ore, hydropower
One of most open economies in world
 >1/2 GDP traded 
More than US, more than any country in course, more than Japan

Welfare State
Various social insurance & welfare schemes come to about 20% GDP
About 2 times U.S. rate - cut substantially 1990s
Over half government expenditure (which is 60% GDP) is transfer payments
Comprehensive free medical care
Pension system ‑ 2/3 earnings
Sick leave, cut in 1991 but still most generous in Europe and thus highest rate of sick time in Europe
Parental leave ‑ pay up to 13 months for couple to share.  80% earnings up to $40,000 year.  Government Commission looking for method to convince men to take more parental leave
Unemployment benefits
Up to 80% of wages but must accept training and placement
Since 1993 no pay for first five days
Poverty virtually non-existent
Lowest rate of child poverty in the course
¼ US rate of child poverty
Taxes ‑ Among most highly taxed people in world
Basic rate 34% and by $43,000 reaches 56%
Comprehensive 23% sales tax
Payroll taxes add 36% to wage bill
Total tax of GDP about 60% 2003, highest in course and similar level of spending
Highest labor force participation rates in world
Lots of part‑time work
Unemployment Rate
2004 5.6%
Long-term unemployment 2004 2nd lowest in course behind only Canada
Capital predominantly in private hands
90% output produced by private firms
High labor costs
Highest in course except for Germany
Higher than USA
Paper Reminder – 10/24
Don’t forget to use a model as a basis for comparison
Societal Ideology
Commitment to "middle way"‑between socialism and capitalism
No major linguistic, ethnic, racial, or religious divisions.  
Has led to strong political focus on issues of economic equity - class
Perhaps considerably more emphasis than in US on democracy and less on individual liberty, i.e. emphasis on rights of group and a bit less on rights of individual
Party Ideologies on IRHRM
Commitment to self determination and Government restraint, changed a bit in the 1970's and 80's
Unions have accepted need for efficiency and rapid growth.  In 1970s attitude of letting management manage began to change
Employers have accepted role of unions and, especially in regime of usual SAP rule, sought accommodation
The Unions
Any group of employees can form a legal union and demand recognition in Sweden (BLW)
Well developed plant structure
Factory Clubs
Oversee application of agreement
Upper levels exercise control over factory clubs
Typical workplace 3 unions ‑ blue collar, salaried, and professional
Branch level or local
Branches deal directly with headquarters
Branches subject to control by headquarters
Branches supervise work of chairs of factory clubs
Largest unions
Municipal workers
Metal Workers
Principally dues
1.8% of typical worker's income
Mostly in conflict funds and since the level of conflict is low, funds have become large
Unions have some sizable business investments
Blue collar federation LO owns and operates country's 2nd largest newspaper
Unions have major interests in housing developments, construction & insurance companies & travel agencies
One of highest in world
Over 80%
Achieved without compulsory membership
People expect to join
Swedes great joiners
1 in every 5 or 6 members receives training in union matters each year
Founded 1898 as SAP affiliate since SAP has served as party and trade union federation
Separated 1909
19 affiliated unions - number shrinking due to mergers
About 2.2 million members - 46% women
Almost all blue collar workers in industrial unions
LO probably the most centralized & powerful union center among the western nations.  LO authority includes right to
Determine internal structure of unions
Sit in on industry level negotiations
High powered economic research unit
Has strongly influenced government policies as well as union policies
TCO‑Central Organization of Salaried Employees
Major confederation of white collar unions
Much less centralized control over affiliates than LO
18 affiliates with 1.2 million members
SACO ‑ Swedish Confederation of Professional Associations
25 affiliates with 540,000 members
Only one of the three really growing
General Relationship to Unions
SAP & LO consider themselves two wings of one movement
Frequent meetings and much interchange of staff
This special relationship, with SAP's almost continuous tenure in office, has given LO status of a partner in government
Affiliation is by and through union branches
When branch affiliates, individual members may contract out
Majority of formal SAP membership by union affiliation
Still majority of members of LO unions in branches which have not affiliated
LO, no formal affiliation
But has representative on party's executive committee
Provides campaign funds
At election time at local and regional level, they are so intertwined as to be indistinguishable
Trade union leaders typically don't serve in cabinet and, if they do, they resign their union offices
Left Party
Former Communist Party
In most countries party that attempts to represent the working class
Significant in terms of Riksdag seats but little influence in unions
Swedish Employers’ Confederation
1902 Employers founded SAF
Originally to provide strike insurance
Association of associations
35 member associations
Financial Structure
SAF charges dues
Plus each affiliated company may be called on to provide funds for strike or lockout emergencies
Policy is not only to recognize unions but to cooperate in administering agreements and encouraging union membership
Has defended management's right to direct the workforce
SAF negotiates, lobbies and provides representation on various public and private boards
Be present at negotiations
Approve all agreements
Require employers to lockout in sympathy ‑ sympathetic lockout legal & crucial to SAF strategy
2001 SAF merged with Federation of Swedish Industries
Fed of Swedish Industries represented mostly service employers and smaller employers
Government has traditionally abstained from interference in substantive terms in the private sector Although barrage of legislation in 1970s increased government substantive and procedural intervention Government does provide mediation but this was restructured in 2000 into the NMO, National Mediation Organization
1993 Government temporarily set aside some aspects of certain collective bargaining agreements that unions had negotiated
Did so for reasons of economic policy
Unions responded by filing complaint against government with ILO
The Framework of Procedural Rules - Public Policy
Traditional policy of non‑interference by government
However, mediation can be imposed
1974 law extended collective bargaining obligation
To areas affecting employment security including discipline (must be reasonable grounds to dismiss) & redundancy
Act on Joint Regulation of Working Life ‑ 1976 ‑ 
Broadened scope of issues management must negotiate before introducing major organizational change including virtually any change in working conditions
That is, virtually eliminated the notion of management rights
Collective bargaining widespread and almost universal for manual workers
1995 Lutheran Ministers went from being government employees to independent employees
Bargained with Association of Parishes
2000 Association of Parishes proposed increasing wages but eliminating overtime and reducing medical benefits
Ministers threatened to strike
The Basic Agreement
1934 Nothin Commission told parties to establish voluntary structure to maintain peace or government would legislate Rise of SAP government meant unions had opportunity to seek worker welfare improvement through full employment policies rather than taking on employers who had proved so tough
Compromise based on economic growth
Management left free to manage efficiently as workers shared benefits
State to stay out
Established Labor Market Committee to deal with issues arising under the agreement
3 LO members and 3 SAF members
Initially industry‑wide bargaining
Supplemented by plant bargaining on local issues, especially incentive payments & job evaluation
In 1941 LO expanded its right to be present at industry negotiations to the right to make proposals Where union rejects LO proposals, strike/lockout assistance may be withheld
These set cost limits on industry agreements
This is where details are determined
Central & industry level bargaining has been carried out by elite of LO & SAF
On friendly terms sharing desire for peaceful settlement
1990 SAF said it would again refuse to negotiate framework agreements
Unhappy that full employment and narrowing of wage differentials seemed non-negotiable
1997 revisions
Industry negotiations conducted by Joint Industry Committee, equal representation and chair chosen by both sides
Subcommittees meet on regular basis as issues come up
Economic Council for Industry – independent economists who can make suggestions at the request of either side or of the chair Chair can order postponement of dispute or continuation of old agreement
Agreements to be of fixed, three-year, durations
"December Compromise" LO & SAF 1906
SAF recognized right to organize & agreed not to discriminate against unionists LO agreed to recognize prerogatives of management to hire, fire, assign work, hire unionists or non unionists
Traditionally, then, management insisted on & unions allowed full scope to modernize, rationalize, automate, etc..  Government stayed out of determination of wages, hours and working conditions
In past, central negotiation had been the crucial level
with parties taking responsibility government takes in other countries for settlements consistent with economic development of country
Equal pay for equal job
bargaining not to focus on financial status of employers
Narrowing wage differentials
Some success at decreasing differentials. 
1959‑79 wage differentials in LO fell by half
By 1990s most egalitarian wage structure in world
Less vacation and holiday time than Germany and France but more than other countries in course 1600 work hours per year, 2003, again more than only Germany or France
Quality of Worklife Issues
In the 1970's the government passed series of laws aimed at increasing scope of employee decision making Series of job re‑design experiments best known at Saab‑Scania & Volvo
Best in the world (measured by index of inequality)
Including wages, job opportunities, and political representation
Discrimination based on sexual orientation is illegal
At start of 20th century Sweden had one of the highest levels of conflict in the world
General strike 1909 disaster for unions
Must give 7 days notice of industrial action
To other side and to mediator
No strikes during agreement
These are the only legal requirements
Secret ballot
must produce 2/3 vote of those affected in favor of industrial action
On employer side, SAF must consent to all lockouts & may order employers to lockout
Lockout normal response to strike
Virtually never replace strikers
Not illegal, just not part of the IR culture
1997 US subsidiary of Swedish firm replaced 200 strikers
Swedish unions protested so much that firm decided to sell subsidiary
Since 1945
Averaged far less time lost than US, Canada or Britain
Growth of white collar participation in such conflict
Now as likely to strike as blue collar workers
Few official strikes,
Most strikes have been unofficial and thus illegal
Only two major national private sector strikes 1956 to 1980 ‑ include 1970 lockout of military officers
1980 worst conflict since 1940s and gave Sweden worst strike record of all major countries for that year
80% of workforce engaged in 2-week strike/lockout
Company refused to sign agreement negotiated by retail employer association and recommended by mediator
Claimed simply to prefer individual agreement
Company also issued rules Swedes found insulting
Employees not to talk to each other while at work
No romantic relationships among employees
Company right to search employees and their cars
Most bargaining agreements have detailed provisions for negotiation of grievances
Grievance discussed first at local level, then at industry level
Then usually Labour Courts (tri‑partite)
These deal with disputes over collective bargaining agreements
Also handle alleged violations of labor and employment laws