Swedish Transport Union: minimum wage could stop social dumping

“It’s modern slavery what's happening on the roads, it is horrible to see how the drivers are exploited. This is no life,” says truck driver Freddy Welle from Gothenburg. 

He says there are several hundred eastern European drivers in the Gothenburg region, mainly from Bulgaria, Romania and Poland. They sleep in their trucks and have no access to showers or toilets. They have to use nature’s facilities. 

“They earn little and can’t afford to shop for food. Instead there are people from their home countries who come here and sell food out of cars.” 

According to Freddy Welle the eastern Europeans earn between 4,500 and 10,000 Swedish kronor (€478 to €1,060) a month, while the Swedish Transport  Workers Union’s collective agreement secures a starting salary of 24,000 kronor (€2,548).

“Swedish transport companies can’t compete on those terms. As a result many Swedish drivers have become unemployed.” 

He wants to point out that eastern European drivers are more than welcome to come and work in Sweden, but they need to be given equal terms. They should have Swedish salaries and they should pay taxes to the country they work in.

How will you achieve that?

“I believe a minimum wage would have been good. The Germans have introduced it and they’ve managed to stop much of this traffic. It would have been good if Transport [the union] and the employers got together to do something about this,” says Freddy Welle.

Joint project

And perhaps the transport sector will become the first in Sweden to introduce some kind of minimum wage. Trade unions and employers are now working on a joint project to study universally applicable collective agreements. They have visited Finland, Norway and the Netherlands. As a result the parties might agree to make the transport agreement statutory.

“We are in a situation where we are struggling to defend the working conditions in our trade via the collective agreement. The reason is the freedom of movement within the EU which means a lot of foreign trucks come here. It is difficult for us to control them all. The trade is being pounded and serious Swedish transport firms are being squeezed out. That is why we are now talking to the employers about what we can do,” says Marcel Carlstedt, a lawyer for the Swedish Transport Workers Union.

Introducing a statutory minimum wage like Germany and many other countries have done is not really an option, however. The alternative is to make the collective agreement universally applicable. 

“We have been studying other countries and we will now analyse their systems. We will then write a cross-party report. It is too early to say whether we will come to an agreement,” says Marcel Carlstedt.

LO opposition

The rest of the members in the Swedish Trade Union Confederation (LO) are opposed to the idea and consider it to be a threat to the collective agreement model. Non-LO member organisations The Swedish Confederation for Professional Employees (TCO) and the Swedish Confederation of Professional Associations (Saco) also share this opinion. 

“LO isn’t exactly cheering from the sidelines, but they have not said that we cannot do this, either. I understand their concerns and if you were to make all collective agreements universally applicable it would be a major interference. But we see that we must do something to save the Swedish transport business,” says Marcel Carlstedt. 

He adds that unions in Finland have not been loosing members as a result of making agreements universally applicable. On the contrary. Even employers’ organisations have gained members. There is also less of a problem with social dumping in Finland.

Curious employers, but...

Employers in the transport trade are curious, but have yet to take a stand.  

“We have a problem with less than serious players who are beating Sweden's transport business. So we want to know more about how the universal application system works. This is a fairly common system elsewhere, but we are still the only ones in the Swedish labour market who are seriously looking at it. The main problem, however, is that there is no effective control of the existing rules,” says Anders Norberg, head of negotiations at the Swedish Transport Group.

He admits that universal application is “a stranger” to the Swedish model and that other members of the Confederation of Swedish Enterprise are not too keen on the idea.

“We do try to keep the state out of the wage formation process, so I am sure this will lead to debate. But in the countries we have visited the employers have not considered this to be a problem,” he says.

Different opinions in the construction industry

The construction industry has a similar problem, but the parties there do not want solutions like this. One reason is that employers and trade unions have opposing views of how things really stand.

“We have not been able to identify any instances of wage dumping,” says Mats Åkerlind, head of negotiations at the Swedish Construction Federation.

“This is a bigger problem than we thought. We get daily reports from workplaces where the collective agreement is not being followed,” says Torbjörn Hagelin, negotiating secretary at the Swedish trade union for construction workers, Byggnads.

According to the union, hourly wages of 80-90 kronor (€8.50-9.50) are normal in the Swedish construction industry, which is only half of what the agreement stipulates. There have been reports of hourly wages as low as eight kronor (€0.85). Torbjörn Hagelin uses the same words as truck driver Freddy Welle to describe this: ”modern slavery”.

Yet employers do not agree, despite several similar cases being highlighted in the media.

“Sure, you can read about examples like this, but if things were as bad as Byggnads claim, we should have discovered some cases. It is bad if people are being exploited and we are working to prevent this. But all the cases we have been looking at fall within the collective agreement. We have no examples of disputes over this,” says Mats Åkerlind.

Hiding the faults

Torbjörn Hagelins answers that this is because employers momentarily fix the faults when the union demands it, but that the problem recurs after a while.

The parties in the construction industry are now trying to use the collective agreement covering main contractor liability which was agreed last year ( see the Nordic Labour Journal, April 2014).  

Mats Åkerlind believes that the best way forward is for the parties to develop their existing agreements, rather than implementing a statutory minimum wage. 

The trade unions share the same view. Yet Torbjörn Hagelin has a couple of points to add to his wish list to make it work really well: more unannounced visits from the Swedish Work Environment Authority to building sites, and a system of attendance registers.

Sticking to the Nordic model

The traditional collective agreement model remains the norm in most of the Swedish labour market. The Swedish Confederation for Professional Employees (TCO), for instance, believes the model works well and that there is no need for change.

“We will stick to our model, but understand that what works in one country or trade might not work equally well everywhere else,” says Mika Domisch, international secretary at TCO.

He points out that many European countries in crisis view statutory minimum wages as a solution. 

“In these countries the agreement system has failed and wage formation would simply not work without a statutory minimum wage. We believe it is important to have a liveable income. Europe needs more purchasing power, but for us it is important that the member countries can choose which solution they want in order to achieve this,” he says.