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Sweden’s Industrial Relations

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Sweden’s Industrial Relations

Sweden, like the other Nordic countries (Finland, Norway and Denmark) has long been associated with the epitome of the welfare state. This region of the world and Sweden in particular, is well known for its strong labor unions and high union participation. According to the CIA, 91% of the Swedish labor force was unionized in 1998 (Virén 201). The strong unions in turn elect government officials who tend to be leftist and support unionization and union power, thus erecting the welfare state that is modern day Sweden. An analysis of the labor organization and industrial relations of Sweden gives great insight into the fluctuations of the Swedish economy as well as the mindset of the Swedish leaders setting economic policy.

Sweden was governed continuously by the Social Democratic party from 1932 until 1976 and the Social Democrats would return to power periodically from the 80’s to the present day. Such a long and continuous period of governance sheds light on two important factors: 1) Swedish citizens are highly in favor of the welfare state to elect officials of the Social Democratic party over and over again and 2) the welfare state is deeply ingrained in the Swedish governance structure. Jan Bohlin agrees that “the long era of Social Democrat governmental rule has obviously left its imprint on Swedish society and the 1930s can be seen as the initial phase of an economic political model that matured after the Second World War” (160). Bohlin separates Swedish economic history into four distinct periods. The first between 1880 and the First World War saw the Swedish government spend heavily on infrastructure. The second, starting in the 1930’s and ending in the 1960’s, the government began using policy to influence economic development and prevent economic downturn. The third, between 1960-80, was characterized by more selective yet ambitious government intervention in industrial relations. Finally, the fourth period, beginning in the 1980’s, sees the government returning to more market solutions (152).

It is the second of Bohlin’s four periods that labor unions began to make their rise in Swedish society. As Evelyne Huber suggests, “conditions in Scandinavia have thus been very favorable for social democracy and their affiliated unions: the economics of all four Nordic countries are small; all are religiously homogenous and Proestant; and only Finland is linguistically divided” (116).
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