A peek into their social and political structure from the beginning of the twentieth century to today's fast paced world and also a study of the hypothesis of convergence will help us in making definite conclusions about the subject.
Katz evaluates three hypotheses that have been suggested to explain the trend towards decentralized bargaining: first, shifts in bargaining power from unions to employers; second, the emergence of new forms of work organization, which put a premium on flexibility and employee participation; and third, the decentralization of corporate structures and diversification of worker preferences. Katz concludes that the second hypothesis is the most convincing, on the grounds that labour and management appear to have gained distinct advantages from work restructuring that accomplished decentralization. However, shifts in bargaining power, as well as the diversification of corporate and worker interests, are important contributing factors to the decentralization process.
Sweden became an industrial society later when compared to most other countries in Europe. At the start of the 20th century, Sweden was a poor agrarian society with high emigration rate. It is now a relatively wealthy, welfare-oriented, service society. Sweden has 25% of its civilian workforce employed in industry, only 2.4% are still in agriculture, while 73% are in services, partly as a result of the strong growth of local and regional government since the 1960s.
Swedish employment relations have long fascinated foreign observers. With a total population of 9 million and with 4.4 million in labour force, Sweden is the smallest of the countries in Europe. However, 76% of its women are in the labour force which is the highest female participation rate of any OECD country.
Employment relations in Sweden have passed through three broad stages since the nineteenth century. The beginning of the union movement was the first stage, which lasted from the 1890s to 1930s.Unions were established during this period and there were disputes between the capitalists and the laborers. The government was either passive or supported the capitalists.
The second stage was approximately from mid-1930s to the early 1970s. The 'Swedish model' was established during this period, with a low level of industrial conflict, a 'solidaristic' wage policy, an active labour market policy and labour-management cooperation. An economic policy reliant on economic growth subsumed many of the pay-related problems for the unions and paved way for a pattern of employment relations with few industrial disputes.
Emergence of a third stage can be traced to the 1970s. More radical union ambitions, the election of a non-socialist government in 1976 severe economic problems, and a strategy based on free enterprise and a market economy, on the employer side, represented significant changes. The 1980 dispute symbolized these developments. Wage earner funds were introduced after a bitter conflict, but were not seen as a complete victory by the unions. The wage earner fund system became a political burden for the Social Democratic Party and did not result in a basic change in Sweden's economic system. The employers tried to reverse the trend as much as