Unemployment insurance funds

Unemployment insurance funds administered by union organisations are pivotal to the Nordic Model.
If we are to safeguard the Swedish welfare model, we have to understand the purpose of the model. It is not only in the interest of the union organisations to have many unionized members but also in that of society. A compulsory unemployment insurance fund would affect the Swedish welfare model negatively.

LO arranged, in the middle of March, a seminar on the administration of the future unemployment insurance funds. Together with LO President Wanja Lundby-Wedin, researchers from Norway and Finland participated. Research from these two countries clearly reveals that countries with unemployment insurance funds administered by union organisations have a higher rate of unionization.

Wanja Lundby-Wedin declared that the employers and the state should also be alarmed by a development in society where the roles of the social partners are being reduced.

If we are to safeguard the Swedish model we cannot, as is done in the report on the social insurances, simply discard the fact that the rate of unionization is important for the competetiveness, wage formation and peace in the Swedish labour market.

The rate of unionization also has a strong influence on the wage formation and the regulation of the labour market. Weak trade union organisations imply less power to wage earners and more power to employers.

In Sweden there are, in comparison to Norway, few sectors and companies that are not covered by collective agreements and that are without adequate regulation. Thus the fact that Sweden has more union members than Norway plays an important part for the likelihood to maintain satisfying labour market conditions.

The Nordic countries have the highest rate of unionisation in the world. Iceland ranks highest ahead of Sweden and Finland, but in Norway, where there are no unemployment insurance funds administered by the union organisations, the rate of unionization is essentially lower.

According to the Finnish researcher participating in the seminar, a high rate of unionization is the precondition for union organisations’ possibilities to conclude agreements for others than their union members. If the union membership plummets, it will not be possible to retain collective agreements for all employees in the labour market. It is a question of being representative.