‘Gender equality fund’ sparks tensions among unions

A new round of wage negotiations in Sweden is about to start amid an atmosphere of discord among unions affiliated to the Swedish Trade Union Confederation LO. Several unions within the industry sector have not accepted LO demands due to a disagreement over the gender pay gap. As a result, solidarity within LO is under pressure and there is uncertainty about whether the industrial agreement will continue to act as the norm for the labour market when the bargaining round begins.

Background

In the bargaining round of 2007 the Swedish Trade Union Confederation (LO) introduced a ‘gender equality fund’ in their central agreement as a way to address the gender pay gap. The fund was introduced because previous central agreements had not helped improve wage equality (SE1006019I), despite employer and employee representatives agreeing on certain wage increases within a fixed time period.

The gender equality fund was created to top-up the wages of low-paid employees in sectors that predominantly employ women, with money coming from employer contributions. It was collected according to central agreements, and distribution took place through local bargaining.

However, questions concerning the impact of the fund in shrinking the gender pay gap were soon raised among LO-affiliated members. Among others, the Union of Metalworkers (IF Metall) argued that the fund did not reach women with low incomes in male-dominated sectors, including many of their own members.

The disunity among LO-affiliated unions led, during the 2010 bargaining round, to the gender equality fund being reworked into a low-income fund that simply gives larger wage increases to all low-income workers, regardless of gender. The idea was that since low-income workers generally tend to be women, the fund would, in its new form, also address the gender gap.

In 2011 LO presented its demands for the next round of wage negotiations, and for the third bargaining round in a row the framework included a reformed gender equality fund. The model presented in 2011 is the result of a compromise between the LO-affiliated unions, and is a combination of the gender equality fund of 2007 and the low-income fund of 2010.

Disunity within LO

On 29 August 2011 LO presented its framework of joint demands for the forthcoming round of wage negotiations. Unions affiliated to LO had until 23 September to respond to the proposed agreement in writing, stating whether they accepted the agreement in full or not.

However, the agreement had already caused discord. Only 12 of the 14 union representatives on the LO board supported the framework agreement, with two opposing the proposals for the new fund.

On 5 September the LO board supplemented the framework of joint demands which included a gender equality fund of SEK 100 a month (about €10.9 a month as at 18 October 2011) payable to an employee within the respective sector earning less than SEK 22,400 (€2,445) a month. This compares unfavourably with the 2010 agreement which gave SEK 125 (€13.6) a month to an employee earning less than SEK 21,300 (€2,325) a month.

Even though most of the representatives on the LO board voted in favour of the framework, there is no guarantee that the unions will accept the agreement in full. On the same day as LO presented its demands, the Swedish Unions within the Unions in Industry partnership (Facken inom Industrin) presented a framework of joint demands of its own – without a gender equality fund.

The disunity among LO-affiliated unions shown during the last wage negotiation remains.

The Union of Metalworkers, the Forestry, Woodworking and Graphic Workers Union (GS), and the Food Workers Union (Livsmedelsarbetarförbundet) are all supportive of LO’s aspiration to close the gender wage gap, but they oppose the methods and financial sums proposed in the LO framework.

The main concern for the partnership of six industrial trade unions is unity and coordination within LO, because LO secures a strong position in collective bargaining negotiations with employers. The partnership supports the fund even though its members would gain more if the fund were to be spread across all employees. Since the wage equality model is in dispute among LO-affiliated members, the six industrial unions fear the disunity will harm the trade unions’ negotiating power in the forthcoming round of wage negotiations.

Tensions between trade unions and employee organisations

There is also tension between trade unions and employee organisations. The chief negotiator for the Association of Swedish Engineering Industries (Teknikföretagen) is critical of the gender equality fund as it is not compatible with the norm-setting role such an industrial agreement has. The Confederation of Swedish Enterprise (Svenskt Näringsliv) believes that the gender pay gap should not be handled by social partners in wage negotiations. However, LO’s deputy leader points out that the gender pay gap has decreased due to the gender equality fund.

Commentary

Sweden’s imminent wage negotiation round is surrounded by uncertainty due to disunity among the unions affiliated to LO, as well as between trade unions and employee organisations over whether a ‘gender equality fund’ is the right way to go about cutting the gender pay gap.

However, one might see the discussion concerning the gender equality fund as progress rather than a setback, since it brings the issue of the gender pay gap into the public arena, and shows that the trade unions are trying to find solutions across all industry sectors. Furthermore, according to the global gender gap report, Sweden’s gender equality is among the highest in the world.

Mats Kullander and Malin Björklund, Oxford Research

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