Bold Nordic agreement without a political “father”

“The project’s boldness was linked to a belief in a planned economy,” says Rune Solberg.

As the top civil servant at Norway’s Ministry of Labour and Social Affairs he has been living with the Nordic labour market for all of his working life, but was not himself part of the negotiations leading up to its birth.

“But I had a boss who was, Hans Cristian Arisholm, and he has told me enough to always keep my interest in the issue alive,” he says. 

He has been doing some digging in documents for a speech he will give during the dinner to celebrate the 60 year anniversary in Reykjavik on 22 May.

“It’s not my ambition to be a historian, though. To be that you need to explore all of the footnotes,” he says.

The basis for the Nordic labour market cooperation was a result of the second world war. Sweden received refugees from Norway and Denmark, who were allowed to work.

“Norwegians could chop and float timber. The organisation springing up around the refugees became the beginnings of the Swedish Public Employment Service. It also led to more liberal attitudes to how labour should be able to move across borders.”

Sweden and Denmark most keen

In the beginning Sweden and Denmark were driving the issue. Sweden’s industry was intact and the country had an export industry which made what Europe needed for its post-war reconstruction — steel, wood and engineering products. Norway, and even more so Finland, had serious misgivings. Both countries needed all the manpower they could muster for the reconstruction. 

“Norway and Finland made sure to include a separate section within the agreement’s paragraph that stipulated that there needed to be full employment in a country before vacancies could be filled with workers from the other neighbouring Nordic countries.”

All of the Nordic countries — Iceland joined later in 1982 — agreed that the labour exchange should be the responsibility of public authorities, and that there would be no private recruitment. 

“The large companies did what the politicians said, and let contracts go through the local employment office. But other factors were probably more important, like having people you knew who had already moved there.”

Hard to measure

The common labour market was introduced at the same time as a passport union which allowed Nordic citizens to travel between countries without a visa or a passport. Migration became hard to measure. At the same time the cooperation between the Nordic ministries of labour became close and substantial.

“Today the common Nordic labour market is more symbolic, as the EU and EEA agreement make the rules. The Nordic agreement is also in breach of EU rules in certain areas,” says Rune Solberg.

One such breach is allowing public labour exchanges the exclusive right to match employers and workers. EU’s freedom of movement of labour is also defined from an individual’s standpoint. No macro-economic considerations are made when European citizens are allowed to move freely.

No political father

The common Nordic labour market was created without big political initiatives, nor was it a result of individual politicians’ efforts. Perhaps they got burned in the attempt at creating a Nordic defence union.

“I think, when I study how the agreement came to be, that it is hard to find the agreement’s political ‘father’,” says Rune Solberg.

But the open Nordic labour market became a success with citizens and it was  established 15 years before all restrictions on the movement of labour were lifted within the EU.

The Nordic labour market’s greatest impact was on the relationship between Finland and Sweden, but there were also many who moved between the other countries.

One million migrants

“Until the 1980s we are talking one million moves all together. 500,000 of these were between Finland and Sweden.”

The movements became so numerous that Finland started talks with Sweden which led to a bilateral ‘channeling agreement’, which put certain limitations on movement. 

Other factors impacting on movement patterns include the bridge between Sweden and Denmark which opened in the year 2000, Norway’s oil industry which has led to a much more rapid salary increase and the 2008 economic crisis which hit Iceland the hardest. Sweden has gone from being the main recipient of workers during the first 50 years, to being the country with the most citizens working in a neighbouring Nordic country.