What is the Swedish Model? I understand it to be the agreement made on the Wallenberg controlled hotel at Saltsjöbaden sometime in the 30ths. In short it is and agreement that no strikes will be allowed or will occur. The business sector in Sweden had accepted an agreement which gave the industry an advantage. The looser is the rest of the economy. Politically the Labour party (SAP) called themselves the winners. The party gained the majority and they kept it for more than 30 years. They gained very much confidence and explained to the Swedish people that the welfare state had been reached, thanks to their policy and the agreement at Saltsjöbaden.
Undoubtedly the living standards in Sweden increased all the time – but so did the living standard in the Northern Europe too. The Labour party took the credit of the welfare state and shared it with the Labour Unions. Still the profit of the agreement went to the industry. The salaries to the industry on the Continent raised quicker than in Sweden. The Unions were obedient to the industry and called it the solidarity of the labour market.
What it is in reality, it is a group of organisation officials on both sides convinced that they do understand better the conditions of an individual employee and and individual employer. Is it really so that the society gained from this agreement? An employee in a business which produced big profits could not profit himself. An employer with a problematic business could not improve his business by employing people at lower salaries, also if several persons were available willing to take the jobs.
The result of this was that a Volvo employee gained much less than a Mercedes employee. It was a rule, not an exception, that employers were driven out of business when they refused a collective agreement in spite of the Unions constant explanation that signing a collective agreement always is voluntary.
No Swedish political party has had the courage to tell the voters.