Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

The Nordic Model Is No Longer A Holy Grail

Philippe Pochet 4th March 2015

Philippe Pochet, Nordic Model

Philippe Pochet

The European social model, virtually forgotten since the 2000s, is making a long-overdue comeback as the effects of the 2008 financial crisis continue to damage European society and exacerbate inequality levels. But this welcome change coincides with significant upheavals in the Nordic model, always seen as “best-in-class”. This has elemental consequences for Europe’s trade unions.

We’ve had a spate of reports on Europe’s “social contract” recently. Marine Boisson-Cohen and Bruno Palier argue for three priorities in the face of public spending pressures on the welfare state, persistent macro-economic imbalances in the eurozone and social tensions linked to free movement of labour. These are: adding a social dimension to the single currency, adapting the common rules framework to take account of the new era of worker mobility, and re-establishing the social model’s sustainability.

Jean Pisani-Ferry and Henrik Enderlein, in a report for the French and German economic minsters, urge cross-border investments, labour reforms in France, greater integration of skilled migrant and women workers in Germany, in a bid to avert a “lost decade” for a stagnant EU economy undermined by joblessness.

Now we’ve just had a study on the Nordic model(s) from a team of Nordic researchers who looked at the prospects for renewing the model – or, at worst, witnessing its decline – in Denmark, Sweden, Finland, Iceland and Norway itself up to 2030. It makes for tough reading.

For starters, they show that the crisis is hurting still in terms of increased unemployment – especially among Swedish young people. Second, employment rates have fallen quite dramatically since the 1990s. They were around 80% then and getting back to that level would require 1.3m new jobs between now and 2030 – a tall order. So, a key pillar of the Nordic model is showing symptoms of collapse – and, with rising inequality, its philosophical fundaments are undermined.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

In fact, there are so many obvious variations as well as similarities in the Nordic model that it’s better to talk of a “family”. Finland, a Eurozone member, and Denmark, a de facto member if not de jure, have both shown negative growth between 2008 and 2014 – around minus 4% accumulatively. But both Norway (up 4%) and Sweden (up 6%) have done well relatively – and they’re not members.

Stockholm

The Nordic Model is runnig into trouble as union membership is falling across Scandinavia.

This group of countries has, however, shared common experiences – and lessons. One is how the political landscape has become fragmented and fractured, with its domination by social democratic parties – the glue holding the Nordic social pact together – at an end. Parties of the far right and right-wing populist groupings have been scoring between 12 and 20% of votes in recent elections, securing a solid base within that landscape. Even so, the welfare state remains intact and continues to enjoy the support of these right-wing and populist parties – although there is evidence that social generosity is being eroded.

But the second shared experience is more worrying from a trade union point of view. Nordic countries traditionally enjoy high rates of union density – up to 80%. These remain pretty high by European standards but are down to around 65% on average. If this continues, only half the labour force will be unionised by 2030. Indeed, if the Norwegian trend is followed generally, membership among wage- and salary-earners would be down to 45% and the unions would have lost a collective 2.1m members.

What’s especially alarming is that it will be an uphill struggle to recoup those membership levels. Young people are turning away from unions in their droves; joining a union is no longer axiomatic on getting a job. Not surprisingly, then, Nordic unions are focussing their efforts on recruitment. At the same time, northern Europe – especially Norway and Sweden – is proving more and more attractive to migrant labour.

One effect of this increased immigration is that there are large numbers of low-skilled workers on the fringes of the labour market or employed in sectors with low unionisation levels, creating a kind of two-tier labour market hitherto unknown in these countries.

One might conclude that the Scandinavian countries may retain some genuine advantages but are no longer quite so exceptional in European terms. But this equalisation with other European countries may bring a small consolation. We and they may now be able to learn from each other in a much richer vein than was possible when the Nordic model was viewed from afar as an unreachable Holy Grail.

Philippe Pochet
Philippe Pochet

Philippe Pochet is general director of the European Trade Union Institute (ETUI). He is author of À la recherche de l'Europe sociale (ETUI, 2019).

You are here: Home / Politics / The Nordic Model Is No Longer A Holy Grail

Most Popular Posts

European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse

Most Recent Posts

geopolitical,Europe Options for Europe’s ‘geopolitical’ futureJon Bloomfield
democracy,democratic Reviving democracy in a fragmented EuropeSusanne Wixforth and Kaoutar Haddouti
EU social agenda,social investment,social protection EU social agenda beyond 2024—no time to wasteFrank Vandenbroucke
pension reform,Germany,Lindner Pension reform in Germany—a market solution?Fabian Mushövel and Nicholas Barr
European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube