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An odd couple: individual wage setting and the largest Swedish trade union

The demise of the solidaristic wage policy, followed by the introduction of individual wage setting, is one of many similar changes in the Swedish welfare regime in recent decades. These changes were often demanded by employers and then eventually accepted and implemented by parts of the labour movement, i.e. Social Democracy and its related trade unions. Ever since its introduction in 1993, however, individual wage setting has created much controversy within Kommunal (the Swedish Municipal Workers' Union), the largest trade union in Sweden. In this light, it is interesting to examine the arguments that convinced a majority of the delegates at the decision-making congresses. Two main arguments in favour of individual wage setting have been put forward by union leaders, namely that the new wage system is appreciated by members and that increased wage dispersion increases productivity, which in turn leads to higher wages. This article reviews these arguments. It is found that member surveys suffer from flaws in methodology and that the productivity argument is ill-founded. The reason for the insistence on individual wage setting must be sought elsewhere.