Sweden: Latest developments in working life Q2 2019

The ongoing decline of union density rates, a new form of employment to encourage labour market integration and SAS pilots going on strike are the main topics of interest in this article. This country update reports on the latest developments in working life in Sweden in the second quarter of 2019.

Union membership rates continue to fall

Since 2006, the trade union density rate in Sweden has fallen from 77% to 67%. The largest drop occurred in 2007–2008 after the unemployment insurance fees were raised and the insurance eligibility criteria were tightened. But although the decrease in density rate eventually slowed down, Anders Kjellberg – a Swedish professor of sociology who recently published a report on the topic – highlights that the 2007–2008 drop created a negative cycle.^[1] It weakened unions at a local level in the years that followed, reducing the member base that local union clubs and representatives rely upon. In turn, this seem to have made it even harder to recruit new members and deliver results to existing members.^[2]

Blue-collar unions have seen the largest drop in membership. One explanation for this is that a large proportion of young people, fixed-term employees and newly arrived migrants work in blue-collar occupations, and these three groups have historically low rates of union membership. Although white-collar workers have a significantly higher rate of union membership than blue-collar workers (72% and 59% respectively), white-collar union density has also decreased for the last two years in a row.

If union density continues to decrease, Professor Kjellberg warns that the Swedish model for collective bargaining could be under threat, and that more and more people may advocate for bargaining extension mechanisms (e.g. the general applicability of collective agreements). However, while trade unions are losing members, membership of employer organisations remains high (88%), which is a stabilising factor.

New measures to promote labour market integration

During the spring, the government held talks with the social partners (the Confederation of Swedish Enterprise, the Swedish Trade Union Confederation (LO) and Unionen) about a new form of employment. This new form was first reported on in 2017^[3], and a formal proposal was recently sent out for consultation.

The aim of the measure is to increase opportunities for migrants and the long-term unemployed to enter the labour market, while simultaneously alleviating the labour and skill shortages experienced by many employers. The model is designed so that the employee receives a combination of a salary from the employer and financial support from the government. While there are other subsidised forms of employment available on the Swedish labour market, the new measure is different as the subsidy is paid directly to the employee instead of to the employer. It therefore removes the administrative burden from the employers, which has proved to be a disincentive to using the already existing subsidies.

The initial idea for the measure was designed in bipartite cooperation between the social partners in 2017 and was originally only available for employers with collective agreements. However, after the coalition government entered into an agreement with the Centre Party and the Liberals in early 2019, the latter two parties demanded that the measure should also be made available to companies without collective agreements and temporary work agencies.^[4]

It remains unclear how employers without collective agreements will be able to use the measure, but an alternative system that would give such companies an equivalent state subsidy is currently being discussed. This has received negative reactions from employer organisations and trade unions that are not involved in the tripartite talks, with many arguing that the current proposal has strayed too far from the original bipartite design.^[5]

The proposal has now been sent to the affected authorities and social partner organisations for consultation. If passed in parliament, the new form of employment will be available from July 2020.

• Swedish Ministry of Employment: Etableringsjobb, Ds 2019:13

Pilots go out on strike

After failing to reach an agreement with Scandinavian Airlines (SAS) on terms regarding working time, wages and cooperation, 1,400 pilots in Denmark, Norway and Sweden went on strike in late April. In total, around 4,000 flights were cancelled, affecting 360,000 passengers. A conclusion was reached after seven days and both parties reported that they were pleased with the new agreement. The new three-year agreement contains, among other points, scheduling clauses that should make it easier for pilots to plan their work and free time.^[6]

Outlook

Most collective agreements are three years in length and therefore every third year sees a more large-scale bargaining round. This will be the case in 2020, when 500 out of 670 agreements (covering around 2.8 million workers) are set to expire and will consequently need to be renegotiated.^[7] As a result, the third and fourth quarter of 2019 are expected to be dominated by activity from social partners as they define their positions ahead of the negotiations.