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UNIONS

Paying dues to the wrong union

The revival this week of the controversy over the Vaxholm blockade pits the Swedish government against the European Commission. But it also raises the question of whether it is proper for a government to be sponsored by a special interest group – the union movement.

Published: 7 October 2005 17:29 CEST

For those who haven’t heard about this one, a Latvian company, Laval, won the contract to build a school in Vaxholm, near Stockholm. The company paid its Latvian workers Latvian wages, but Byggnads argued that it should pay Swedish wages and sign a collective agreement. The union started a blockade of the site, leading to Laval filing for bankruptcy.

The government has supported the union all the way, but this week European Commissioner Charlie McCreevy said that he would oppose Byggnads when the case came to the European Court.

This issue is not cut and dry. There is an understandable desire on the part of Swedish building workers to protect their wages against cheap competition, or “wage dumping”.

Sweden also has a duty to allow people from other EU countries to live and work here. This is good for Sweden’s economy, and presents a challenges to Swedish companies to become more innovative and more competitive. More to the point, it is what Sweden signed up to when it joined the EU.

But perhaps the most interesting question the affair raises is this: with the enormous influence of the union movement on Swedish politics, how do we know whose interests the government is acting in?

The Social Democrats, who were founded out of the union movement have ruled Sweden for 64 of the last 75 years and received 85 million kronor from union organisation LO (of which Byggnads is a member) during the 2002 general election.

So when Sweden’s employment minister Hans Karlsson prefers to defend the protectionism of Byggnads rather than the principle of free movement of labour within the EU, it is reasonable to question his motives.

Again, when workers on the T-bana, Stockholm’s metro system, started illegal wildcat strikes this week, where was the condemnation from the Social Democrat administrations both in the City Hall and in central government?

A trade union organisation is just as much of a special interest group as any company. It may represent many of its members, but it does not represent the electorate as a whole. Therefore it should still be treated as one voice among many, like any other pressure group.

It could be that in the Vaxholm case Hans Karlsson is simply persuaded of the union’s argument. But his position would be a lot more credible if the organisation he is defending wasn’t the one that put him in his job.

Is the government too cosy with the unions? Discuss!

WORKING IN GERMANY

German steelworkers agree 6.5 percent pay hike after strike

Tens of thousands of steel workers in western Germany will get a 6.5-percent pay hike this year - the biggest jump in three decades - in a settlement that could set the tone for industry as inflation soars.

Published: 15 June 2022 12:37 CEST
German steelworkers agree 6.5 percent pay hike after strike

The agreed increase would come into effect “from August 1st”, the IG Metall union in the region of North Rhine-Westphalia said in a statement Wednesday.

The 68,000 steelworkers in the industrial region would also receive a one-off payment of 500 euros for the months of June and July, the union said.

The outcome of the negotiations was “the biggest increase in wages in the steel industry in percentage terms in 30 years,” said IG Metall boss, Joerg Hofmann.

Germany’s largest union, IG Metall launched a strike action at steelworks in the west in May after management failed to meet its demands for an 8.2 percent pay increase.

On Thursday at the peak of the movement, around 16,000 workers across 50 firms downed tools, the union said.

READ ALSO: Should foreign workers join a German union?

“Rising inflation” and the “good economic situation” of the steel industry were the basis for IG Metall’s demands.

Consumer prices rose at a 7.9-percent rate in Germany in May, a record for the country since reunification in 1990 driven by the outbreak of the war in Ukraine.

The smaller number of steelworkers in the east of Germany, who are also seeking an 8.2 percent pay boost, have yet to reach their own agreement.

Negotiations are currently taking place in a number of sectors. In the textile industry, 12,000 workers in the east of Germany sealed a 5.6 percent pay increase at the beginning of May.

Meanwhile, negotiations covering the auto industry, and mechanical and electrical engineering will begin in November.

Despite the agreed rise the onus was still on government to relieve the pressure on workers form rising prices “in the coming months”, IG Metall boss Hofmann said.

Significant wage demands have prompted concerns of a wage-price spiral, where rising pay sustains higher inflation.

The European Central Bank last week said it would raise its interest rates for the first time in over a decade this July as it seeks to stamp out price rises.

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