The Swedish Ghent system and trade unions under pressure

Abstract

In January 2007 the Swedish centre-right government in office since September 2006 raised considerably fees for union unemployment funds. Union membership (fund membership included) therefore suddenly became much more expensive. Trade unions lost 8% of their members over two years and union density fell by 6 percentage points, while unemployment funds were hit by a still larger decline. In 2008, fund fees were more closely linked to the rate of unemployment among the members of each fund. The result was a marked social polarisation of fund fees, in 2009 further sharpened by accelerating unemployment. In addition to describing the consequences of the government policy, this article discusses the ambition of the government to influence wage formation by remodelling the Swedish Ghent system.