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23 October 2017

Sweden: Opposition proposal undermines the country’s labour market model

The Swedish centre-right parliamentary opposition has developed a proposal to introduce a new form of employment, based on a 70% starter salary. Trade unions and the Swedish government have criticised the proposal, saying politicians should not interfere with the Swedish labour market model, which is based on negotiations between trade unions and employers.

The four centre-right parties in the Swedish parliament (Riksdag)  proposal aims to introduce a new form of employment, which has 70% of a normal starting salary. According to the opposition, this will bring more young people and other new entrants into the labour market. Their target groups are youngsters under the age of 23, and people who have come to Sweden in the last five years. These jobs should be available for up to three years, with a salary of up to a monthly maximum SEK 21,000 (2200 euro). The centre-right opposition operates as the Alliance (in Swedish: Alliansen, formally Allians för Sverige). It consists of the four mainly liberal conservative and Christian-democratic political parties in the Swedish parliament. The Alliance, formed while in opposition, continued into government until their electoral defeat in 2014. The Alliance has shown little commitment to the Swedish model of industrial relations.

Trade unions and the Swedish government have been clear in their response to the opposition’s proposal: politicians should not get involved in setting salaries. The Minister for Enterprise has said that this approach could undermine a fundamental principle on which the Swedish labour market is based: that being that wage negotiations are carried out between the employers and the trade unions. The minister recognises that, the promotion of education and training is important but is clear that new measures should not be introduced by legislation.  

In its reaction, the trade union confederation LO referred to the own proposal, formulated in the spring of 2017: which introduces a combination of work and education for a lower salary, for a limited period of time. The LO’s proposal would introduce ‘special training jobs’.  According to the LO these education and training jobs should lead to regular permanent jobs, but with certain temporary conditions.

At the launch of its proposal, the LO said that it could accept that those employed under the special training jobs, should face lower wages. But it recognised that it is reasonable for employers to seek lower costs, so wages for these schemes should be settled in negotiations with the employers’ organisations.

But, so far, the employers' organisation Svensk Näringsliv has not been particularly interested in the either the opposition’s or the LO’s proposal.

The trade union confederation TCO, has made it clear that it is strongly against the idea of politicians setting pay levels.

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