Karl Ove Moene and Michael Wallerstein
Solidaristic Wage Bargaining
Unions potentially affect the distribution of
wages among workers far more than they
alter the functional distribution of income
between wages and profits. In countries with
decentralized bargaining systems, the main
effect of unions is to standardize wages paid
to similar workers within the same plant or
firm (Freeman and Medoff 1984, Hirsch and
Addison 1986). In countries with more cen-
tralized bargaining, however, unions may sig-
nificantly transform the distribution of inco-
me from wages and salaries throughout the
labor force.
Perhaps the most dramatic instance
of union-sponsored wage equalization occur-
red during the postwar years in the
Scandinavian countries of Norway and
Sweden. In both Norway and Sweden, an
ambitiously egalitarian wage policy was
adopted by the central blue-collar confedera-
tions in the early 1950s and pursued steadily
for three decades. Solidaristic bargaining, as
the policy was named, called for theequaliza-
* University of Oslo and Northwestern
University. The Authors are grateful to the
Norwegian Research Council for financial
support.
tion of workers' pre-tax income by elimina-
ting or reducing the wage differentials that
existed between plants within the same
industry, between industries, between regi-
ons and ultimately between occupations.
"Equal pay for equal work" is a common
demand of unions, easily explained by uni-
ons' desire to reduce managerial discretion
and competition from low-wage employers.
The Nordic unions are unique, however, in
extending the principal of "equal pay for
equal work" from one industry to the entire
economy, and then moving beyond the
demand for "equal pay for equal work"
toward the goal of "equal pay for all work"
(Hibbs and Locking 1991:3).
The egalitarian wage policy was
remarkably effective. In Sweden between
1970, when comprehensive wage data on
individuals began to be collected, and 1983,
when the system of centralized bargaining
collapsed, the variance of the log of hourly
wages among private sector blue-collar wor-
kers declined by over 50 per cent (Hibbs and
Locking 1991). That dramatic decrease does
not include the equally prominent reduction
of the wage differential between blue-collar
and white-collar workers. Hibbs (1990a,