Sweden, which built its postwar prosperity and welfare state on unusually cooperative labor relations, was brought close to a standstill today by escalating nationwide pay dispute.
Management lockouts, labor union strikes and overtime bans involving nearly half the country's work force have shut down manufacturing industries, stopped construction work, grounded all airplanes and closed stores, restaurants and hotels.
It is Sweden's worst labor dispute since the general strike of 1909. Some schools have been closed and work at many hospitals has been slowed. The Stockholm subway has been stopped for the first time since it was built. Radio and television broadcasts have been blacked out except for occasional newscasts. Vital imports of food and oil have been blocked.
Although the beginning of a spring holiday weekend has minimized the impact of the work stoppages until the middle of the next week, serious damage could be done to Sweden's economy if a settlement is not reached soon.
"It's not yet as bad as it looks because of the holiday weekend," said one official in Stockholm, "And I still expect an agreement next week, but if I'm wrong, the country could be in real trouble."
The cause of the disruption is a breakdown of the Swedish wage bargaining system that had previously been a model for management-labor relations with management representatives and unions agreeing on terms for pay raises and benefits.
The squeeze on the Swedish economy caused by worldwide slowdowns and high energy prices has made it impossible for employers to agree to big pay increases of the past. Added to Sweden's economic woes are shrinking profits and the increased difficulty in selling Swedish products at prices inflated by high wages. Exports also have been hurt by strong competition from industrializing Third World countries and a lag in Swedish development of new technology, according to economic analysts in Stockholm.
As the room for compromise in national wage bargaining narrowed in recent years, employers and unions became increasingly stubborn and moved closer to a complete breakdown in negotiations and a national shutdown.
During the current bargaining, Swedish employers offered little increase in wages beyond an adjustment for last years's 8 percent inflation rate. Union leaders held out for a raise large enough to cover this year's expected inflation of about 11 percent.
"Trade unionists alone should not be expected to carry the total burden for Sweden's ailing economy," said Gunnar Nilsson, chairman of the Swedish Federation of Trade Unions.
Earlier this week, union leaders rejected a "final" pay offer from government-appointed mediators of a 2.3 percent raise on top of the cost-of-living adjustment.
Their action triggered today's management lockouts and union strikes in manufacturing industries, including Volvo car factories, paper mills and shipping. This added to a week-old industrial action by government employes that had already disrupted transportation and other public services.
The government has tried to sweeten the package for workers by offering to extend an emergency six-week freeze on prices until the end of the year and to reduce taxes for the standard deduction. But otherwise Prime Minister Thorbjorn Falldin said today, the government will not intervene in the management-labor negotiations.
The opposition, union-based Social. Democrats also appear to be trying to profit politically from a labor dispute. This could topple the coalition government, which won a single-vote majority in the Swedish parliament in last autumn's national election.Earlier this week, opposition leader and former prime minister Olof Palme called for the coalition to resign.
"The Social Democrats cannot on their own bring down the government," a leading Social Democrat, Thage Peterson, told the Swedish newspaper Aftonbladet. "But if the wage-earners can overthrow the government through a major strike, the party leadership would have nothing against it."