The Scandinavian Way
The Scandinavian Way The push for economic demoeraey in Scandinavia has been shaped by some key economic and political factors: Ii Welfare and taxes cut enthusiasm for raising money wages....
...Dependence on foreign trade means that inflation which prices Scandinavian goods out of the world market is catastrophic...
...J.L...
...This has enabled unions to force the general wage level up and to cut wage differentials through the "solidaristic wage policy...
...The taxes necessary to support them are among the highest in the world...
...F?ll employment remains the primary national economic goal...
...Effects of inflationary union wage Settlements are not dampened by the declining ability to consume of over-whelming numbers of non-unionized employes, as in the United States...
...This tempts skilled workers to turn to wildcat strikes to maintain wage differentials, since their wage restraint directly increases the profit of their employers...
...Labor unions organize about 75 per cent of the wage and salary workers in Scandinavia as compared to 35 to 45 per cent in Germany, Britain, and Holland, and about 25 per cent in the United States...
...that, too, is inflationary...
...This policy calls for skilled workers in the most advanced, profitable companies to forego some wage increases (thus raising profits and increasing investment in the advanced, export-oriented sector) in return for higher wage increases in the more backward and less profitable sec-tors...
...Contract bargaining is national in scope, not Company by Company...
...Having the tax collector make off with 50 per cent of every raise reduces the value of wage increases...
...Increasing worker influence offers a way out...
...Thus, in Scandinavia wage increases are of declining value, since the tax collector gets most of wage gains, wage restraint is necessary for vital exports, and those whose restraint is most vital are in-creasingly rebellious...
...Scandinavian Social Democrats have reshaped Scandinavian life since the 1930s through the creation of a network of social welfare programs that provide real economic se-curity...
...It is a nonwage benefit that can be traded for wage restraint, has no negative impact on the balance of payments, is not demon-strably inflationary, and cannot be taxed...
...The union federation and the employers' confederation sit down together to work out a general national contract...
Vol. 45 • September 1981 • No. 9
