Stress testing the Nordic models: Manufacturing labour adjustments during crisis

Abstract

This article discusses how the actors in the internationally exposed sectors of four Nordic economies responded to the economic crisis of 2008. Though Denmark, Finland, Norway

Board‐Level Employee Representation (BLER) and Firms’ Responses to Crisis

“…More recently, the public and academic debate about this characteristic of the employee–employer relationship has been gaining new momentum, with anecdotal evidence pointing to the relevance of employee–employer cooperation for swift adjustment to unfavorable economic conditions during the Great Recession (CEEMET ; Glassner, Keune, and Marginson ; Svalund et al. ) . This paper aims to contribute to this debate by analyzing the association between BLER and firms’ behavior in the event of a negative demand shock.…”

“…Across Europe, many companies presumably responded to the Great Recession by undertaking actions to reduce labor costs, from dismissals and early retirements to more integrative solutions based on employee–employer agreements on internal redeployments, temporary working adjustments, and changes in pay systems (Glassner, Keune, and Marginson ; Svalund et al. ). Theoretically, when workers care about both wages and employment, as is likely the case during an industry‐wide shock or global crisis, integrative solutions, which allow workers to trade a (temporary) reduction in their earnings for employment, might be Pareto superior to unilateral employment reductions (Aoki ; McDonald and Solow ).…”

“…In Sweden and Denmark, for instance, the demand for manufacturing fell by 20 percent during 2008–2009, on average, demanding substantial and swift reductions in labor costs (Svalund et al. ). Scandinavian companies presumably responded with a variety of measures, from workforce cuts to novel integrative solutions (Svalund et al.…”

After the Great Recession: Unions’ Views on Transnational Interests and Cooperation

“…The rapid recovery in Sweden's main export markets, stable domestic demand, aggressive interest rate cuts, and collective bargaining practices restricting inflation helped in bringing the recession to a close. Here, Sweden is used to illustrate the more general character of the Nordic countries, in that it is close to the ideal type of national competitive corporatism, meaning that it is wary of more ambitious and coordinated Europe-wide trade union measures that would challenge the national competitive corporative arrangements (Bengtsson & Ryner 2017;Svalund et al 2013). Although similar in many respects to Sweden, Denmark suffered a budget crisis and the government was reluctant to contribute, causing the social partnership arrangement to be less pronounced after the Great Recession.…”

“…Although similar in many respects to Sweden, Denmark suffered a budget crisis and the government was reluctant to contribute, causing the social partnership arrangement to be less pronounced after the Great Recession. Also, greater employer influence meant more restricted union involvement in decision-making regarding labor adjustments (Svalund et al 2013).…”