The politics of inflation and revitalisation of wage solidarity in Scandinavia

Abstract

This article compares the policy and collective bargaining responses in the three Scandinavian countries to the cost-of-living crisis that began in 2021. The countries are known for their coordinated and consensual response to exogenous shocks. However, Scandinavian variants of neoliberal reforms, the 2009 Financial Crisis and, more recently, the COVID-19 pandemic have challenged the model. The comparative analysis finds three things. First, Norway and Sweden opted for rather generous measures compared with Denmark, and their measures were generally universal in nature, whereas the Danish measures were more targeted on specific groups. Second, with no statutory minimum wage, all three countries relied on collective bargaining to shore up wage incomes. Third, the different responses in the three countries pertain to different political and economic problem loads. We also find signs of convergence as wage solidarity seems to be experiencing a revitalisation in all three countries. This could have lasting effects on bargaining systems.