A week of mounting labor unrest has thrown Sweden, a country long synonymous with sound industrial relations, into a state of crisis. The dispute began last week when the Swedish Employers Association (SAF) declared a one-week lock out of 750,000 workers after the Swedish Labor Union Confederation (LO) rejected its bottom-line offer of a 2.3 percent wage rise. The LO wanted an 11.3 percent hike.
The LO responded to the lock out by calling an indefinite strike.
After a long May Day weekend, the two sides still refused to negotiate May 5 -- despite the mediators' search for an opening in the deadlock. Instead, the SAF extended its lock out an additional week to May 19 in response to the LO's threat of extended strikes.
"The Swedish model is finished once capitalists and workers no longer can work together," said Gunnar Nilsson, chief of the LO.
"This is a final indication that the Swedish model doesn't function. It works fine in an expanding economy, but now it has lost its value," said SAF managing director Olof Lunggren.
For 42 years, Sweden has been the envy of many countries because of its tranquil, give-and-take wage negotiations. In 1931, a strike broke out in northern Sweden. Soldiers were called in and killed five strikers. The nation was aghast.
This incident laid the foundation for the historic 1938 Saltsjobaden agreement. This is basically a constitution governing the negotiations between labor and management on wages and terms of employment. The bargaining is performed once a year by the LO and the SAF on behalf of the entire nation.
Some say that the current "bourgeois" government, headed by Prime Minister Thorbjorn Falldin, is to blame for letting this year's talks get out of control. Had the Social Democrats, who heavily molded the precedents for the working of the Saltsjobaden agreement, still been governing, this current strife would never have happened, some maintain.
Social Democratic Leader Olof Palme has pushed this idea and demanded that Mr. Falldin step aside and let him solve the dispute. Mr. Falldin so far refuses to get involved.
There has even been speculation that the Social Democrats, who are heavily supported by the LO, have created this crisis by being unusually stubborn and un-Swedishly uncompromising in order to topple the three-party coalition government.
However, Swedes generally are not clamoring for Mr. Palme to act as the savior in the crisis. The idea that Mr. Palme could use the situation to regain office is unacceptable to workers as well as management. It would be too devious and misuse the bargaining process.
What is more likely is that the LO has felt a need to save face in this year's round of discussions. For the past two years, the LO has settled for low increases for its members on the basis Sweden was suffering a recession that called for nationwide belt-tightening. At the same time, the union has suffered a loss in membership.
When the SAF began this year's talks offering absolutely no increase and then came around to a mere 2.3 percent bottom-line offer, the LO was backed into a corner. Despite general agreement by all that the belt-tightening must continue in order to begin to keep down the nation's spurting balance-of-payments deficit , the LO had to defend its credibility to its followers.
Two other factors seem to have led to Sweden's unheard of strife.
Previously, the Social Democrats as the union party were always near at hand with shirt-sleeve diplomacy to help ease through a compromise.
Now, because there is a "bourgeois" government, the LO is suspicious that the employers have the upper hand by having a pro-business government. The SAF has been tough enough to warrant the accusation as well.
But the world's present economic state may be much more of a force in the disintegration of the "Swedish model." The 1973 oil crisis caught Sweden -- a prosperous nation of 8.5 million -- using oil for over 80 percent of its energy.
Now, Sweden finds itself in the same boat as many other Western nations: with a saturated home market, shrinking export markets, rising prices, and soaring inflation. The country has borrowed heavily overseas and is struggling to finance its debt and yet kept its citizens warm during the long winters.
The average blue-collar worker is not vehemently in favor of the strike -- it is just a matter of solidarity with the union. A weekend radio call-in show in central Sweden, where the major industries are situated, reflects this feeling. Blue-collar workers accounted for 90 percent of the callers and 70 percent of them maintained that neither they nor Sweden could afford the dispute.
Already, the major paper, pulp, and steel industries have warned that the cost of the conflict will be very high. Much more importantly, the industrialists fear they will lose irreplaceable market shares. In many cases, Swedish industry has won its export markets, particuarly in Europe, by virtue of on-time deliveries and strike-free production.