Sweden: Latest working life developments – Q3 2017

A strike among waste collectors, a tax reduction on union membership fees and an increase in the share of people aged over 65 in employment are the main topics of interest in this article. This country update reports on the latest developments in working life in Sweden in the third quarter of 2017.

Strike in waste management sector

In July 2017, waste collectors employed by Reno Norden in Stockholm went on unofficial strike, protesting over new standards in the collective agreement that entailed an increase in working time (from 29 to 34 hours per week) and new salary arrangements which, according to the collectors, would mean a sharp drop in their wages. However, as the strike was unofficial it did not have the support of the Swedish Transportation Workers’ Union. The Labour Court declared the strike unlawful as there was a collective agreement in place, and said that the workers’ action constituted a breach of the peace. The Labour Court ordered the workers to return to work, but around 70 workers resigned in protest. Reno Norden is now suing the workers who participated in the strike for damages. The strike attracted a lot of attention, partly because unofficial strikes are relatively rare in the Swedish labour market.

Tax reduction for trade union membership fees

While union density in Sweden is high by international standards, the rate of organisation among Swedish workers is currently at a record low. During the last decade, union density has decreased by eight percentage points (from 77% to 69%), and is particularly low among blue-collar workers. The decrease has been traced to the removal of the union fee tax break, and an increase in unemployment insurance fees in 2007 by the centre-right government. As part of the budget bill for 2018, the current government proposes reintroducing the tax break.

The Minister for Finance, Magdalena Andersson, says the aim of the reform is to increase union density, as it is an important part of the Swedish model and key to ensuring a high degree of collective bargaining coverage. According to researcher Anders Kjellberg, it is not possible to say by how much union density can be expected to increase due to the tax reduction, especially as it depends on how effectively the unions manage to inform the public about the reform.

The political opposition has attacked the tax cut. A representative from the Swedish Centre Party stated that the money would have been better spent on tax reductions for small enterprises or measures to combat mental ill-health among young people, adding that the government should not be involved in deciding which organisations people should join. However, the proposal is likely to pass and the reform is set to come into force in July 2018.

More people over 65 in employment

Statistics Sweden has reported on income and employment development for people aged over 65 (PDF). Since the right to remain in employment until the age of 67 was introduced in 2000, the share of 66-year-olds with a wage income has doubled from 18% to 36%. But not only has the number of people in employment increased, those who are employed also work more hours than before. Furthermore, the report shows that more men than women choose to remain in employment after the age of 65 and that it is more common for white-collar workers than blue-collar workers. Aside from financial incentives to work, factors such as better health can also explain the choice to stay longer in employment.

Commentary

Significant events in the fourth quarter of 2017 will include parliament voting on the budget bill for 2018, and bipartite negotiations between the social partners in nearly all blue-collar sectors, with the purpose of creating a new form of employment to facilitate labour market integration of newly arrived immigrants.

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