Labor Markets, Production Strategies, and Wage Bargaining Institutions

Transformed patterns of labor market governance occupy a central place in the study of contemporary West European political economies. Here, detailed analysis of the dramatic decentralization of wage bargaining in Sweden identifies organized employers, especially engineering employers, as the decisive agents of institutional change. We argue that the employer offensive should be understood as a response to a shift in power within old wage-bargaining institutions, introducing invasive regulation of firm-level pay practices and, at the same time, as a consequence of new flexibility-centered production strategies, giving rise to demands for more firm-level autonomy in wage bargaining. The exceptional features of the old Swedish bargaining and the particular needs of different sectors come into play as we seek to explain the mixed pattern of wage-bargaining changes across Western Europe.