SAS agreement will lead to wage squeeze in other companies

Many employers will be inspired by the SAS management and dictate a reduction in wages as a means to get through the crisis. That is the prediction of one of the leading labour market experts in the Nordic region, Professor Flemming Ibsen from Aalborg University:

“It is obvious that many employers will have tasted blood now and want to use the SAS model to demand wage reductions from employees,” says Flemming Ibsen.

Businesses attempting to save their way out of the crisis is a European trend which is now reaching the Nordic countries, says the Confederation of Professionals in Denmark (FTF), which represents 450,000 public and private sector workers. FTF also represents 1,400 Danish cabin crew organised in the Cabin Attendants Union (CAU), the last union to agree to the SAS management savings plan.

FTF’s President, Bente Sorgenfrey, said she found the trend very worrying:

“Cutting wages reduces people’s purchasing power. That hits consumption and growth and creates a downward spiral.”

New culture of consensus

Another new trend, says Flemming Ibsen, is for trade unions and employees to accept a reduction in wages. Earlier trade unions were mainly preoccupied with securing better pay for their members, as well as improved pension and work conditions, and left it to employers to adjust the number of workers they hired. But after four years of economic crisis and reductions in unemployment benefits, just securing jobs for members ranks highly on the trade unions list of priorities, says Flemming Ibsen.

The Professor predicts a new culture of consensus in the labour market which is not built on conflict, but where the social partners are facing a common enemy:

“Today’s big common enemy are the global market forces, and there is a growing understanding between the social partners that it is necessary to stand together and improve competitiveness, which means trade unions must be innovative participants.”

Wounds to heal

Flemming Ibsen considers the Nordic labour market model to be an important tool in that fight, and he is highly critical of the manner in which the SAS management has treated trade unions in its drive to reach an agreement on longer working hours and less pay:

“We have a Nordic tradition of negotiation and talking nicely to each other, but both the SAS management and the politicians approached the trade unions very aggressively in this instance. So there are wounds which must be healed.”

He finds it atypical in breach of all conventions that the SAS management came to the negotiating table with a final agreement and an ultimatum demanding unions sign or face closure, and that the Danish and Swedish finance ministers actively put pressure on trade unions.