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“LO in Sweden is probably facing a greater challenge than in Norway. But you should be careful to predict the permanent demise of the coordinated wage setting model. This is not the first time the social partners have failed to coordinate their demands. After a few years they have usually come back,” says Jon Erik Dølvik, a researcher at Norway's Fafo research foundation.
On 15 February Fafo hosts a seminar on Swedish and Norwegian wage negotiations, based on a report written in cooperation with the Centre for Wage Formation: ‘The Frontfag Model yesterday, today and tomorrow’.
The ‘frontfag’ model is similar to Sweden’s wage setting model, which means the competitive industry decides how big wage increases can be before they become unsustainable.
“Nordic trade unions have always studied each other and have been inspired by each other. But they have different histories and are to a degree organised in different ways. In Norway you won’t find the same clear division between workers and officials, for instance. Norwegian LO organises both groups and even though trade union membership is lower, LO dominates completely when it comes to wage negotiations in the private sector.”
In the short term employers are probably more influence by each other. If employers in one country for instance demand more flexibility in wage negotiations, this could impact on employers in a different country.
Jon Erik Dølvik points out that the industry sector also influences the negotiation process. Norway, with its large oil sector, is very dependent on coordinating wage negotiations. If everyone followed the oil sector’s wage standards, other industries would not survive. In Sweden technology firms in the IT sector play a bigger part.
Björn Lindahl
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