Solidaristic Wage Bargaining



82


Karl Ove Moene and Michael Wallerstein

port for wage equality are that single-rate
wage agreements reduce managerial discreti-
on and that greater wage equality increases
"worker solidarity and organizational unity"
(80). However, there is no reason why the
elimination of managerial discretion requires
a single rate. A wage scale with control over
the criteria for promotion would do as well.
Finally, the Nordic experience indicates that
the reduction of wage differentials can
undermine the unity of the union move-
ment, if it is imposed against the wishes of
the relatively high paid. Much of the recent
industrial conflict in the Nordic countries
consists of battles within the labor move-
ment over relative wages.

It is easy to understand why relative-
ly low-paid, public-sector workers support
Solidaristic bargaining, but why should skil-
led workers in the private sector support
such a policy? Why should the union lea-
dership in Norway and Sweden struggle to
limit local bargaining when the traditional
core of the union movement are among tho-
se with greatest bargaining power at the local
level? For many scholars, the difficulty of
answering such questions implies that econo-
mic analyses based on self-interested behavi-
or must be abandoned in favor of the socio-
logical emphasis on norms (Elster 1989a,
1989b). Swenson (1989), for example, sim-
ply considers wage levelling as one of three
goals that define "egalitarian unions" (the
other two being secure employment and
increasing wages at the expense of profits).

The traditional social democratic
view, as expressed by Korpi (1978, 1983)
among others, goes as follows. The goal of
Solidaristic bargaining is an expression of a
deep ideological commitment of the
Scandinavian labor movements to the norm
of equality. The rise and fall of the imple-
mentation of Solidaristic bargaining reflects
the increase and decline of the power of the
labor movement vis-a-vis employers. When
the labor movement was dominant in the
1950s and 1960s, the unions had the power
to impose Solidaristic bargaining on employ-
ers. In the 1980s, employers gained the
upper hand and used their new strength to
roll back the unions' gains.

In view of the large body of work
that asserts that Solidaristic bargaining was a
simple reflection of union strength and egali-
tarian commitments, it is somewhat surpri-
sing to return to the original arguments
made on behalf of Solidaristic bargaining
when the policy was first proposed in 1951
by two Swedish union economists, Gosta
Rehn and Rudolf Meidner (LO: 1953).
Rehn and Meidner's principal arguments in
favor of Solidaristic bargaining concerned
macroeconomic stability and efficiency, not
equality. Rehn and Meidner argued that a
policy of "equal pay for equal work" that eli-
minated wage differentials between plants
within industries and between industries
would encourage the movement of capital
and labor from less productive to more pro-
ductive uses. Holding down wages in the
most productive enterprises would encoura-
ge their expansion and provide employment
for the labor that would be released as less
productive enterprises were forced to close.
At the microeconomic level, aggregate effici-
ency would increase. At the macroeconomic
level, the growth of the more productive
firms would allow government policy-makers
to be less concerned with the survival of mar-
ginal enterprises, and freer to pursue price
stability without sacrificing employment.
That the wage policy was egalitarian in its
impact on the distribution of wage incomes
was undoubtedly welcomed by Rehn and
Meidner, but the egalitarian impact of soli-
daristic bargaining was of marginal concern



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