The Origins of the Swedish Wage Bargaining Model

Abstract

That export-led industry sets the wage norm for the whole economy, acting as the "wage leader", is a celebrated part of the Swedish wage bargaining and labour market model. Export- led wage leadership is assumed to lead to controlled, non-inflationary wage increases, as wages are set with international competition in mind. This paper maps the origins of this export industry wage leadership model, showing that the conventional cross-class alliance story focusing on the 1930s does not square with the facts. Going through the central trade union wage bargaining protocols from 1939 to 1959, I show that industry wage leadership was non- existent in the 1930s. In fact, wage formation at the time was quite decentralized. Instead, industry wage leadership was created only in the 1950s. The driving force behind it was not a cross-class alliance between workers and employers in export industry against home market workers, but rather the integration of the trade union wage policy into a Social Democratic macroeconomic project.