Swedish employers ready defense of labour deal to keep wages down

Bloomberg

Sweden’s main employer group is preparing to defend the key pillar of the Nordic country’s labour market against a brewing union wage rebellion.
The deal setting industrial workers salaries as a benchmark for overall wages is crucial in maintaining Sweden’s welfare state and is the envy of competitors, according to Fredrik Persson, chairman of the Confederation of Swedish Enterprise.
The two-decade deal is coming under increasing fire from a number of unions as Sweden prepares for wage negotiations next year. A broad swath of Sweden’s labour market, in particular those involved in the domestic economy, are starting to question the system that was put in place to protect jobs and prevent out-sized wage gains that could erode Sweden’s competitiveness.
But other unions support the deal, including the powerful metal workers group and Persson hopes he can count on his allies in the conflict ahead.
“On our side, there’s total backing of the model,” he said in an interview. “It doesn’t look like the union side will end up in the same 100 percent backing, but I still have strong faith that it will work out well.”
Critics say the benchmark system wasn’t set up to solve the kind of shortages seen now in providing workers to Sweden’s welfare state.
Teachers, nurses and doctors have seen slightly higher wage increases in recent years, but not enough to solve the situation.
Unions and employers are now gearing up for the next round of collective bargaining talks, which set the wages of nearly 3 million workers in the country of 10 million.
Higher wages could also go some of the way in alleviating the Swedish central bank’s inflation problem. The Riksbank has been forced to push rates far below zero over the past four years in part because of meager wage growth.