Blue-collar unions concentrate on low-paid workers

Bargaining for the 1998 wages round will take place under changed circumstances. For the first time, all trade unions have declared their intention to keep pay increases within inflation. Leading trade unions and employers' organisations have also introduced new bargaining procedures. This has created tensions among the blue-collar unions, which nevertheless on 13 October 1997 were able to agree on the claims that they should present to the employers.

On 16 September 1997, the Salaried Employees' Union (HTF) and the Association of Graduate Engineers (CF) on the one hand, and the Swedish Federation of Trade, Commerce and Service (Svensk Handel och Tjänsteföretagen) on the other, opened negotiations on pay and conditions for 1998 on behalf of around 80,000 salaried employees. Other sectors have since followed. Pay bargaining for 1998 in the private sector has started earlier than usual, which is a reflection of the fact that negotiations are being conducted under different circumstances.

For the first time all trade unions have declared their ambition to keep pay increases within the level of inflation. They know that the Government and the Bank of Sweden would inevitably introduce tightening measures if pay rises turned out to be injurious to the national economy. In its budget bill, the Government budgeted for no more than a 3.5% general pay increase.

This bargaining round will also be the first test for the two new procedural agreements - one covering around 800,000 workers of all categories in industry (SE9703110N), the other covering salaried employees in the commerce and service sectors (SE9709139N). Both contain provisions that should help to speed up negotiations, with the aim that a new agreement should be reached before the existing one runs out. The parties have therefore indirectly committed themselves to avoiding industrial action, since such action is prohibited by law as long as an existing agreement is in force.

Although it has not entered into any formal procedural agreement, the Commercial Employees' Union (Handelsanställdasförbund, or Handels), which organises blue-collar workers, has the same ambition and has started talks with its opposite numbers earlier than ever, six months before the present agreements expire.

Wage solidarity policy

The new situation has, however, created new tensions between unions representing low-paid groups and other unions whose members are in a better position. In the period of centrally coordinated negotiations for the whole private sector between the Swedish Trade Union Confederation (LO) and the Swedish Employers' Confederation (SAF), LO pursued what was called a wage solidarity policy that served to level out wage differentials not only between workers within the same sector but also across different sectors. Thus the central agreements contained rather detailed rules on how the increases should be allocated, with particular attention being given to increasing pay for low-paid workers. This usually meant that workers in prospering sectors received less through the central agreements than they might have obtained had it not been for the policy coordination of the unions in the negotiations. On the other hand, workers in the more prosperous sectors were often compensated through wage drift during the currency of the agreements.

Since SAF backed out of the coordinated negotiations at the end of the 1980s each union has bargained on its own, but LO has sought to coordinate their claims. The focus on low-paid workers has however not been very attractive to the majority of union members, particularly as most of them have had to suffer a decrease in their living standards over the past few years. Now that there seems to be some room for increases in real pay again HTF and the Municipal Workers' Union (Kommunalarbetareförbundet, or Kommunal) advocate a return to a policy of wage solidarity under the slogan "You cannot live on percentages, only pounds and pennies will pay the bills". They want to emphasise that 3.5% of SEK 13,000 per month (which is the average wage among their members) is quite a lot less than the same percentage of SEK 20,000 (which is a normal wage for a metalworker or a paperworker). Considering that most of their members work part-time - many of them involuntarily - the difference would in effect be even greater.

What these unions were suggesting, when the blue-collar unions tried to coordinate their pay claim to the employers, was that highly paid workers in industry should have to accept an increase of 2%, while workers in, for example, the retail trade and the municipalities should receive 4%-5%, which would give them just as much in cash terms. Many of the industrial unions advocated a claim that would favour low-paid workers, but the Metalworkers' Union (Metallindustriarbetareförbundet) and Paperworkers' Union (Pappersindustriarbetareförbundet) threatened to back out if the low-paid were given "too much". The result was a compromise. On 13 October, the unions agreed to demand a rise of SEK 300 per month for every worker, plus 1.5% of the total paybill to be distributed in negotiations at sector or company level. In addition, the minimum holiday pay entitlement should be increased to SEK 750 per day, which would give SEK 2,000 extra per year for a typical member of Handels or Kommunal, but nothing to workers with higher incomes. According to LO, the claim would cost the employers 3.75% of the total paybill.

Working time reduction

A majority of unions also wanted the LO unions to unite in a joint demand for a general reduction in annual working time, the cost of which should be deducted from the eventual pay settlement. However, on this point they were unable to reach agreement. The Transport Workers' Union (Transportarbetareförbundet) favours a reduction for those who have irregular working hours in the first place, and the members of Handels and Kommunal are unwilling to sacrifice pay for shorter working hours. Consequently, individual trade unions themselves will decide how they should handle this matter.

The employers' reaction to the wage claim was negative. According to Göran Trogen, head of the Almega Industrial and Chemical Association, experience shows that claims of this kind unquestionably force up wages to unacceptable levels. He also pointed out that the newly appointed Economic Council for Industry has stated that increases of 1.5%-2% require increases in productivity, which are not always possible in many sectors. He also expressed employers' objections to any reductions of working hours.


All trade unions assert that they want to conclude "responsible" agreements, but in spite of the compromise reached within LO it is obvious that the blue-collar unions are unable to agree on the real meaning of the word. The white-collar unions have yet to reveal their position.

The unions which are calling for a reduction of working time are very determined to achieve their objective, and it is not all that impossible that some of them may succeed in obtaining some reduction in hours in exchange for more flexible rules on how working time can be organised.

As for the new bargaining procedures, HTF and CF believe that they have failed in their negotiations with Svensk Handel, because they had to call for the assistance of the special conciliation board after four weeks of fruitless negotiations. (Kerstin Ahlberg, NIWL)

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