Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden

By Peter A. Swenson | Go to book overview

6
EGALITARIAN EMPLOYERS
Behind SwedishWage Equality

Apowerful labor movement, a centralized, multi-industry bargaining system, asolidaristic wage policy—hence a compressed income structure. According to virtually all scholarly accounts of the development of labor market governance in the 1950s and 1960s in Sweden, these things followed almost as inevitably as the seasons ofthe year. Thus, convention has it that employers had to pay aprice to get the powerful, egalitarian labor confederation tosubmit to pressure for wage restraint at the national level. “The price for getting LO to go along”, according to onehistorian's typical view, “was to negotiate aboutsolidaristic wage policy. ” Organizational unity and tightlabor markets gave the Social Democratic labor movement enormous leverage to impose its egalitarian agenda. LO wouldsacrifice wage militancy in exchange for intersectoral equalityand “employers were forced into discussions about thefairness of wage differentials. ” The wage discourse was, quite simply, “conducted on Social Democracy'sterms. ” 1

Tobe sure, the term solidaristic wage policy belonged to the laborconfederation, popularized by LO economist Albin Lind in hisfamous essay published in 1938, the year of the Basic Agreementat Saltsj—en. Employers did not appropriate and use itthemselves, at least openly. Nor did they challenge the ideauntil the 1970s, when the labor confederation began invoking it formore radical purposes than before. When it still denoted theinitial purpose attached to it by the labor movement—equal payfor equal work across firms and industries—employers wentalong contentedly. 2

In practice, moving in the direction of equal payfor equal work was acheived in different ways by LO and SAFnegotiators in the 1950s and 1960s. Usually it took the form ofa floor on wage increases for any particular multiemployercontract unit and at times extra increases for female workers. Ineffect, the “differentiated” structure ofcontractual increases consistently gave low-pay sectors fasterwage growth than others. It logically entailed, as in-

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