The typical view of the so-called Swedish Model is based on a tradition of consensus between employers and trade unions. A new doctoral thesis from the School of Business, Economics and Law at the University of Gothenburg shows that the notion of consensus is clearly exaggerated and that the two sides have disagreed strongly about the Swedish labour supply.
While the employers have advocated a liberal immigration policy, the labour unions managed to limit labour immigration to Sweden – and the entry of women into the labour market was not stimulated by either side.
Joacim Waara, researcher in Economic History at the School of Business, Economics and Law in Gothenburg, has conducted the first study nationally and internationally that focuses on the behaviour of Swedish employer organisations from 1945 to 1973, which was a period of labour scarcity. While there is a great deal of research on the Swedish trade unions, the employer side has received remarkably little attention.
'The study sheds light on the fundamental conflict of interest between employers and trade unions regarding the labour supply. Trade unions benefit from labour scarcity, while employers prefer a certain degree of unemployment. Both sides want to control the supply of, demand for and price of labour. In the long run, this affects the general attitude to labour immigration,' says Waara.
It is generally perceived that the Swedish Model is based on a tradition of consensus between employers and labour unions in the labour market. However, the new study shows that the notion of consensus is largely exaggerated.
'Admittedly, the trade unions and the employers did have a shared interest in promoting economic and industrial growth, but they disagreed completely on the extent to which the labour supply should be stimulated. The close relationship with the Social Democratic Party government and strong influence over the National Labour Market Board enabled the Swedish Trade Union Confederation (LO) to control the labour supply and regulate immigration. The employer side lacked any comparable influence,' says Waara, who found other noteworthy results as well:
'The trade unions managed to protect the existing labour force by not promoting the entry of Swedish-born women into the labour market in the 1940s and 1950s. To stimulate the labour supply, the employers acted and argued for a more liberal immigration policy, but received very limited support from the government. What is more surprising is that the businesses were unwilling to adapt the work environment and work hours in a way that would facilitate the entry of Swedish-born women into the labour market.'
The study is particularly important in an era when Sweden once again is experiencing a shortage of labour in some sectors and regions,' says Waara:
'We can learn from the behaviour of the labour market actors and see that they often prioritise their own interests over what's good for society, when it comes to labour immigration and labour supply. The things trade unions and employers say and do in media should be viewed against the background of this self-serving bias.'
The thesis has been successfully defended.