The Nordic labour market models: Adjustment in turbulent times

Known for their strong collective organizations and coordinated bargaining, the Nordic labour market models have been faced with sweeping changes over the past decades. After severe crisis and double-digit unemployment in the early 1990s, entrance into the Single Market and adjustment to EU/EMU in the 1990s, followed by the Eastward enlargements of the labour market in the 2000s, have put pressure on the labour market institutions. Significant adjustments in bargaining coordination in the 1990s were followed by strong labour market recoveries. In the 2000s, however, reforms in the Ghent-systems of unemployment insurance in Denmark and Sweden, following similar changes in Finland, prompted union decline, while rising labour immigration propelled low wage competition and strains on labour market regulations, amplified by ECJ decisions that the Swedish/Danish way to uphold national wage floors were in breech with EU rules. On top of all these, the financial crisis hit the export-dependent Nordic economies, except Norway, quite hard. This paper aims to compare the contentious adjustments unfolding in the Nordic countries and discuss how the actor responses may influence the Nordic models viability and ability to adjust to the challenges.