By Patrick Lannin
STOCKHOLM (Reuters) – “It’s easier with a Latvian,”
promises the recruitment agency’s Web site. To drive the point
home, it adds that staff from the Baltic state will cut a
Swedish employer’s wage costs by 50 percent.
The offer from a Latvian firm is the latest challenge to
Sweden’s decades-old system of setting wages through
sector-wide deals with employers in a country where 85 percent
of workers belong to a trade union.
The arrival of cheaper workers from new European Union
members has inflamed the debate, with trade unions describing
the practice of hiring low-cost migrants as modern slavery.
It’s a delicate issue in a country where unemployment
stands at a relatively high 7.1 percent.
The trade unions’ concerns are echoed across Europe, which
embraced 10 new members from mainly eastern European countries
last year. Some “old” European Union countries worry that the
bloc’s expansion will see locals replaced by migrant workers.
Maris Sergeyenko, who runs the Swedish arm of Latvian
recruitment firm Eiropas Eksperti through the www.hyrlett.nu
Web site, disputed the “slavery” label and said business was
good.
“Earlier we had 30 to 40 people in Sweden. Now it is around
100 and it could be around 400 to 500 by the end of the year if
all goes as it is going now,” the 24-year-old Latvian said.
The appeal for Latvians is clear. “Europe’s money will
become yours,” proclaims Eiropas Eksperti’s Latvian Web site.
Sergeyenko said the salaries offered by his company were
below those Swedes would earn but were still higher than those
offered in Latvia. Average salaries in Sweden are almost 10
times higher than in Latvia.
“They are lower, but it’s not slave labor like the unions
say,” he said, adding that his company also provided
accommodation for the workers.
“APARTHEID LABOR”
Sweden’s trade unions say the use of low-cost workers
threatens the “Swedish model” of fair labor. The dispute has
soured relations between the two countries.
“We don’t accept any apartheid labor market in Sweden where
you have one wage for Swedes and one for others,” said Erland
Olauson, senior official at powerful trade union federation
LO.
Last year, Latvian building firm Laval had to stop work on
a school in Vaxholm near Stockholm after unions refused to work
with Latvians who were not paid under a Swedish collective
deal.
Another Latvian builder, Bygg-Lett, has also faced strikes
while carmaker Volvo had to negotiate with unions and raise
salaries for Slovaks employed by a supplier.
Under EU rules citizens are free to settle and work
anywhere in the bloc but the ex-communist newcomers were forced
to accept restrictions on free labor movement for up to seven
years in most states. Sweden was among the few that opened its
markets.
A recent report from a civil rights watchdog, the European
Citizen Action Service, found the EU’s expansion had not
unleashed floods of cheap labor. Official data showed migration
west at well below 1 percent of the workforce.
EU IMPLICATIONS
Olauson said foreign firms were welcome in Sweden, as long
as they abided by rules on collective deals that provide a
floor for salaries in a country with no legal minimum wage.
The collective wage deal system began in 1938 and is viewed
as having fostered harmonious industrial relations.
With the welfare state, funded by the world’s highest tax
take, it is part of the “Swedish model” of economic management
which has made the country one of the richest in the world.
Olauson said strikes were an effective tool against firms
believed to be bending the rules, although it was difficult to
target firms operating through the Internet.
Christer Walivaara, international secretary at builders’
union Bygnadd, said some employers also said foreigners were
self employed, meaning collective deals did not apply.
The issue could be complicated further by EU legislation.
After the Vaxholm conflict, Sweden’s labor court asked for a
ruling from the European Court of Justice.
It wanted to know whether Sweden’s system was in line with
EU rules on the free movement of labor and whether industrial
action could be taken against a foreign company, even if it had
a collective wage deal in its land of origin.
“If EU law would make it impossible to take industrial
action in the way we normally do then this would be a big
problem,” Olausen said.
A judgment is likely to take between one and two years.
An added worry for unions comes from Sweden’s main
employers’ group. It wants change in collective wage deals and
is covering the Latvian firm’s costs for the EU court case.
Sergeyenko said his agency did not want to undercut Swedes,
but help reduce gaps in wealth on either side of the Baltic
Sea.
Building union official Walivaara said pressures for change
were mounting. “It is a critical time right now. We believe
this a good system, it’s what made Sweden so strong when it
comes to workers instead of having constant conflict,” he said.
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