Swedish Employers and Trade Unions, Varieties of Capitalism and Labour Migration Policies

Swedish Employers and Trade Unions, Varieties of Capitalism and Labour Migration Policies This article explores the extent to which the varieties of capitalism (VoC) approach can inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. VoC scholars maintain that policymakers prefer reforms conforming to the national political economy. Employers are also thought to support policies incentivecompatible with the prevailing model of capitalism. The analysis presents a case that is partly at odds with the view of economic and social policy reform developed in the VoC approach. The analysis show that the Swedish Confederation of Enterprise prefers a market-liberal labour migration policy, while the Swedish Trade Union Confederation prefers state-coordinated labour migration policies compatible with central features of the Swedish coordinated model ­ active labour market policies and strong trade unions. Keywords VoC approach · organised interests · labour migration policy · SN, LO Received 3 October 2011 accepted 28 March 2012 Jesper Johansson* Linnaeus University, Växjö, Sweden Introduction Increased labour migration has been singled out in several European countries as a means to address the coming challenge of a rapidly ageing population and related issues of labour shortages and problems of maintaining funding for generous social services. Sweden stands out as a prime example regarding the urgency of these issues, and the rediscovered interest in labour migration among policymakers in the last 10­15 years. Demographic and labour market forecasts pointing to a sharply shrinking workforce in the immediate future have led to public discussion in Sweden about whether to reintroduce large-scale labour migration. Employers in the Swedish Confederation of Enterprise (SN) and bourgeois parties have advocated a more liberal migration policy to grant non-EU citizens access to the domestic labour market. The Social Democratic Labour Party (SAP) and the Trade Union Confederation (LO) have been more sceptical about the proposals to liberalise Sweden's labour migration policy. However, despite the fact that any debate over the potential value of changes in labour migration policies inevitably touches upon core issues associated with the politics of economic reform, few studies until recently have had a political-economy approach in the study of labour migration policymaking. As stated by Georg Menz and Alexander Caviedes (2010), much of the existing migration literature, especially in political science, has had a fairly state-centric view and has treated migration policy as an exclusive domain of governments. The political activities of non-state actors and individual institutions, such as employer and labour organisations in the case of this article, have been given less scholarly attention. Moreover, many contributions commit themselves exclusively to the subfield of migration studies and in doing so fail to take advantage of theories outside the migration field. For political-economy accounts of migration, one either has to go back to the 1970s (Castles & Kosack 1973; Piore 1979) or rely on the few accounts published since then (Caviedes 2010a, 2010b; Cole & Dales 1999; Freeman 2006; Menz 2008, 2010). As further contended by Menz and Caviedes, post-war immigration to Europe is rooted in economic migration, so `it seems clear that a broad survey of economic migration trends should be embedded within the larger discourse on the changing political economy of Europe and the world' (Menz & Caviedes 2010: 4). 2 The Swedish case of organised interests and labour migration policy reform: analytical perspectives I adopt a perspective that is influenced both by leading theories in comparative political economy and by previous work concerning the role of organised interests in migration studies. Hence, I explore the extent to which perspectives on policymaking within the varieties of capitalism (VoC) literature can fruitfully inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. The VoC * E-mail: jesper.johansson@lnu.se literature is thought to open up `substantial new perspectives on both economic and social policymaking', with proponents hypothesising that institutional change and policy reform within liberal market economies (LMEs) and coordinated market economies (CMEs) will generally be complementary to the broader pattern of coordination defining a given political economy (Hall & Soskice 2001: 45). The process of labour migration policy reform in Sweden is well-suited for exploring the explanatory power of this assumption about economic and social policymaking. Sweden is often characterised as a role model of a coordinated market economy in this literature, and therefore suits as a critical case. Furthermore, the debate about labour migration in Sweden has frequently centred on issues that are central in the VoC approach and in previous work on the role of employers in migration studies (Caviedes 2010a, 2010b; Menz 2008, 2010), for instance the desire of firms to secure a suitable skilled workforce, as well as patterns of coordination between social partners about wage and productivity levels. Finally, the debate about labour migration is important for a closely related discussion within comparative political economy regarding whether Sweden could still be regarded as a prime example of a corporatist political system (cf. Bucken-Knapp 2009). This article presents a case that is partly at odds with the view of economic and social policy reform developed in the VoC approach. A central argument of the VoC literature is that only economic policies complementary to the coordinating capacities embedded in the existing political economy will be effective policy choices. Such compatible policies are thought to be preferred by governments and their strategic allies in order to reinforce the capacities of firms and to ensure better economic performance (Hall & Soskice 2001). However, the analysis presented in this article shows that while LO has preferred a state-coordinated labour migration policy, it has not done so based on preferences for efficiency or goals related to economic performance. Rather, LO has feared that liberalisation, as preferred by employers in SN, would damage core features of the Swedish model, undermining the Swedish active labour market policy and weakening the Swedish trade union movement (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994; Lundqvist 2002). The Swedish case of labour migration policy highlights the degree to which political conflict between labour and capital remains a central feature of the economic and social policy reform process ­ a feature that is underdeveloped in much of the VoC literature, which has a rather functionalist character. The debate about labour migration between the social partners in Sweden underscores how battle lines mostly are sketched out on the basis of collective interests and not on the basis of a perceived contribution to maintaining institutional stability. The analysis relies on organisational reports and proposals from SN and LO, parliamentary minutes, committee motions and reports, and press material including releases, commentaries and statements made by officials of SN and LO. assess the analytical gains and deficits of the VoC literature for the study of Swedish labour migration policy reform. Thereafter, I complete the theoretical section by presenting a distinction between two broad ideal types of labour migration policy being debated in Sweden, market-liberal and state-coordinated. The article then shifts gears to the empirical section, first providing a brief overview of Swedish labour migration policy from the 1960s until the early 2000s. I then focus on the debate during the 2000s leading to a liberalisation shift in late 2008, when the Swedish government and parliament adopted a market-liberal approach to non-EU labour migration, allowing employers to hire freely from outside the EU. In the analysis of this debate, I discuss SN's proposals for a relaxation of the rules governing labour migration. In doing so I emphasise how the implementation of the employer preferences resulted in a largely market-based approach to migration, and ended the state-led coordination of work permit applications between the social partners and the Swedish Labour Market Board (AMS). Finally, I focus on the trade union response to these proposals and the liberal shift in policy, detailing how LO dismissed employer calls for reform. LO rather supported a labour migration policy that will neither undermine earlier economic policy efforts of SAP to achieve full employment, nor threaten the position of organised labour within the broader political framework of Swedish society. The concluding discussion addresses the implications of the Swedish case of labour migration policy reform for the analysis of economic and social policy reform in advanced capitalist economies. Social partners, labour migration policy preferences and models of capitalism Outline of the article This article proceeds as follows. I begin by outlining the theoretical contributions and discussing previous research relevant to this study on the preferences held by organised interests in relation to labour migration, and my assessment of this previous research. Then I present a summary of the VoC approach, focusing on the emphasis within this literature on the close links between economic policymaking and the prevailing national model of capitalism. I also The key factor in analysing labour migration policy is the involvement (or lack of involvement) of the social partners, whose influence over policy and its implementation is often shielded from public scrutiny (Freeman 1979). Studies have predominantly centred on the role of trade unions, who should oppose labour immigration because of its potential for lowering wages within regulated labour markets and providing alternative labour in times of conflict (Castles & Kosack 1973; Haus 2002). Thus, a recently developing body of research has shown that the labour movement during the last few decades in the context of globalisation has become more open to managed forms of labour immigration compared to a restrictive approach and substantial unregulated migration (Avci & McDonald 2000; Haus 2002; Krings 2010; Watts 2002). These studies reviewed thus far have had much to offer regarding the understanding of both trade unions' migration policy preferences and migration policy outcomes influenced by organised labour. Nevertheless, especially Leah Haus's (2002) and Julie Watts's (2002) globalisation-inspired thesis that increased economic globalisation has tipped organised labour away from a restrictive labour migration policy cannot be grafted successfully onto the particularities of the Swedish case. In relation to this study of the Swedish labour migration policy reform, Haus's and Watts's studies do not offer a compelling account of which policy reform alternatives organised labour has preferred, or how the migration policy should be structured regarding institutional arrangements. Haus's and Watts's studies also are confined to the US, France, Italy and Spain, national contexts where both organised labour and the welfare state have been comparatively weak. Neither Haus nor Watts consider how the presence of a well-developed welfare state may have any impact on the labour migration policy preferences of trade unions or allied Left parties. Therefore, there is uncertainty regarding how powerful trade unions will react to the prospect of increased labour migration, particularly in contexts like Sweden where the institutional structure of the political economy have historically been broadly supportive of organised labour's aims and of a strong welfare state. Accordingly, this study aims to complement previous research, in order to shed light on how an influential trade union movement like LO and a powerful employer organisation like SN in an advanced industrial country such as Sweden have developed their labour migration policy preferences. Though organised business played a key role in earlier Marxistinspired research during the 1970s and 1980s (Castles & Kosack 1973; Miles 1987; Piore 1979), rather little scholarly attention has been paid to the role of employer associations in migration studies in recent decades (exceptions are Caviedes 2010a, 2010b; Cerna 2009; Menz 2008, 2010). Both Menz (2008, 2010) and Caviedes (2010a, 2010b) have adopted a comparative-capitalisms approach in their studies of employer preferences in relation to migration policy. Especially Menz (2008, 2010) has argued that the interests of employers, both in general and in relation to migration policy, `are shaped by the particularities of the national production systems they are imbedded in' (Menz 2010: 25). Menz (2008, 2010) and Caviedes (2010a, 2010b) are both influenced by the VoC approach's understanding of varying employer preferences. Against this backdrop I will present a summary of the VoC approach and a critical assessment of the analytical advantages and weaknesses of this approach to the study of the Swedish labour migration policy reform process. The VoC approach has rapidly become central to the field of comparative political economy. The VoC literature contributes explanations of why, in the context of globalisation and neoliberalism, different capitalist political economies have not converged inevitably into one institutional form. Peter A. Hall and David Soskice (2001) argue that this lack of institutional convergence towards liberal capitalism can be accounted for by examining the functional relationship among institutions of the national economy. The authors adopt a firm-centred approach to political economy, and refer to firms as the `key agents of adjustment in the face of technological change or international competition' (Hall & Soskice 2001: 6). As the central agents, firms engage in relationships with other rational and strategic actors as a means of resolving coordination problems in five spheres of the political economy: industrial relations, vocational training and education, corporate governance, inter-firm relations, and relations between employers and employees. Based on the institutions devised to solve these coordination problems among competing actors, national economies can be placed into one of two broad categories, either LMEs or CMEs. In LMEs, firms coordinate their activities primarily via competitive market arrangements, while in CMSs, firms rely to a greater extent on non-market relationships to coordinate business relations (Hall & Soskice 2001). The emergence of these distinct institutional clusters is largely explained by the presence of institutional complementarities across different spheres. According to Hall and Soskice (2001), the resolution of a coordination problem in one sphere by either market or non-market means will increase the likelihood that a similar strategy will be adopted when facing coordination problems in other areas of the political economy. The VoC literature does not, however, simply address the question of accounting for sustained institutional differences among capitalist economies. This approach is also intended to account for the dynamics associated with economic policy reform in advanced industrialised economies. In general, a functionalist perspective on public policymaking is dominant in the influential VoC volume of Hall and Soskice (2001), with policy measures portrayed as measures intended to maintain and support the continued workings of the broader institutional environment. Hall and Soskice specify that policies stand the greatest chance of achieving desired objectives when they are `incentive compatible': successful public policies are those that act as a complement to the prevailing institutional cluster in the national political economy, while unsuccessful policies are in friction with the logic of coordination predominantly operative in the five spheres. The importance of compatibility between spheres of the political economy and policy reform is also thought to be significant for actors' policy preferences. Focusing especially on employers, Margarita Estevez-Abe, Torben Iversen and David Soskice (2001) have emphasised how the design of the political economy can shape social policy preferences, in that `rational employers who pursue distinctive product market strategies can benefit from welfare programs and policies that favour their product strategy' (EstevezAbe, Iversen & Soskice 2001: 160). Stuart Wood (2001) also makes a similar point in his analysis of economic policy reform, arguing that employers' preferences are `derived from the properties of CMEs and LMEs' (Wood 2001: 249) and further noting that `employers will look to public policy to maintain and reinforce the variety of institutional competitive advantage upon which they rely' (Wood 2001: 251). Critics of the VoC approach have challenged this functionalist interpretation of institutional reform and policymaking. Chris Howell (2003) has argued that the VoC approach sees states acting `largely at the behest of employers', and presenting a picture that `employer preferences determine the content of policy'. He also stresses that, in the VoC approach, states do not `appear to have interests distinguishable from those of employers, nor do they have the capacity to act independently, still less against employer interests' (Howell 2003: 121). Related to this criticism is the charge that the VoC approach stresses the importance of continuity more than institutional and policy change. This emphasis in the core VoC literature on institutional complementarities and supporting public policies has led critics to argue that there is a lack of discussion of cases `where the hallmark self-reinforcing equilibrium is lacking, and where there are signs of institutional and policy change that could bring about shifts from one mode to another' (Bucken-Knapp 2009: 20­21). Thus, the VoC approach contributes to the understanding of the Swedish labour migration policy reform process in positive ways. In the migration literature, shifts in the degree of restrictiveness or openness of a state's labour migration policy have often been explained by references to changes in the national unemployment rates (Meyers 2004), and the degree to which affected parties mobilise and engage in interest group politics (Freeman 1995, 2002, 2006). Institutions have also been assigned a significant role, structuring the access that domestic groups have to migration policymakers and to relevant actors in legislatures, bureaucracies and labour market boards (Geddes 2003; Hollifield 1992; Lahav & Guiraudon 2006). Nevertheless, as also earlier stressed by Gregg Bucken-Knapp (2009), little attention has been paid to the question of whether and how functional complements among institutions may themselves contribute to the preferences of immigration policymakers. Hence, given the tight nexus between labour migration policy and many features of the national political economy, it appears reasonable to assume that the logic of institutional and policy complementarities embedded in the VoC approach can make an important contribution to the analysis of labour migration policy (cf. Caviedes 2010a, 2010b; Menz 2008, 2010). Undoubtedly, a strength of the VoC approach is that it focuses attention on the importance of incentive compatibility when considering the interrelationship among institutions and policies of the political economy. Indeed, this is important for the study of labour migration, where few recent studies have sought to examine how migration policy reform reflects the desire of policymakers and other interest groups to structure labour migration policy in a manner consistent with the workings of broader economic and social policies (important exceptions are Bucken-Knapp 2009; Caviedes 2010a, 2010b; Menz 2008, 2010). Moreover, labour migration can have substantial effects on the economy and polity of the receiving country, including wage levels, union density rates, unemployment insurance and other social policies, and the extent to which migrant workers are able to participate in political life (Bucken-Knapp 2009; Castles & Kosack 1973; Menz 2008; Menz & Caviedes 2010). As such, the study of labour migration focuses on concerns that have been of central importance in the VoC approach: the study of industrial relations, labour market policy, welfare state reform, and prerequisites for public policymaking. However, the case study of the role of organised interests in the Swedish labour migration policy reform process will also lend further empirical support to the criticism of the VoC approach and its functionalist character in two related ways. First, I will show that LO has opted to maintain a labour migration policy that the confederation regards as CME-consistent, not for functionalist reasons per se, but out of concern over the implications of a market-liberal policy shift for central features of the Swedish model (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994; Lundqvist 2002). Second, the employers in SN have played a central role in the reform process of the Swedish labour migration policy, although it would be difficult to characterise SN's labour migration policy preferences as consistent with the workings of the Swedish CME. Rather, SN has proposed policy reforms that emphasised policies and institutions of a LME, and not features of the Swedish model. migration policy can stipulate that social benefits for labour migrants are to be phased in over a number of years, providing incentives for migrants to stay active on the labour market. On the other hand, policymakers may instead implement what can be considered as a state-coordinated labour migration policy. Concepts such as corporatism and neo-corporatism are also used to refer to these institutional structures of policymaking, where interest organisations are involved in decision-making and implementation (cf. Williamson 1989). This ideal type of policy is characterised by a state-led coordination capacity, and the inclusion of multiple actors in the work permit decision process, with employers, unions and labour market board officials having influence over whether permits should be approved or rejected. Immigrants may be admitted on either permanent or temporary permits. Labour migrants who are admitted on temporary work permits will generally be restricted to employment in specific sectors of the labour market, and only granted access after it has been determined that domestic labour shortages exist. There are limited possibilities for temporary work permit holders to move freely throughout the labour market, and they will generally be expected to leave the country upon completion, or loss, of a job. Social benefits may also be limited for temporary migrants. The initial granting of permanent residence permits for purposes of labour migration will also be dependent upon the existence of labour shortages in general, or specific skill shortages. As permanent residents may not have labour market restrictions placed upon them, employers can be required to offer open-ended contracts in order to decrease the possibilities that migrants will find movement throughout the labour market an attractive option. Social benefits will generally be provided to labour migrants with a permanent residence permit in the same manner as they are to national citizens. Given that labour shortages can be either partial or general, both small- and large-scale immigration are possible under state-coordinated labour migration. Market-liberal or state-coordinated labour migration policy Swedish labour migration policy: a historical background to the policy reform debate during the 2000s As the analysis of the Swedish case will show, a central feature of the Swedish debate has been the institutional arrangements in respect of how to organise labour migration. Here, two broad ideal types of labour migration policy can be outlined. On the one hand, policymakers can opt for a strategy of market-liberal labour migration, in which employers are granted control over work permit approvals. This market-based form of labour migration casts the hiring needs of firms as the principal determinant of the granting of work permits. The scale of labour migration will largely result from the demand for labour by various employers. Furthermore, potential migrants are not restricted to a given occupation sector and may pursue possible employment opportunities across the labour market without state-imposed restrictions reflecting broader employment trends or economic policy goals. Given that employer needs for labour are central to a market-driven, liberal labour migration policy, labour migrants who find themselves unemployed do not have to leave the destination country immediately. As labour migrants possess unrestricted labour market access, they are free to pursue all employment possibilities while in possession of a valid work permit. Provisions may exist for temporary work permits to be converted into the permanent residence permits after a certain period of continuous employment. Finally, to pursue a flexible labour market, liberal From the 1970s until the 2000s, immigration to the Nordic countries has been dominated by family-related migration and refugee migration. The EU enlargement eastwards in 2004 and 2007 has represented a new phase concerning increased labour migration to the Nordic countries. In Sweden the proportions of this particular form of intra-EU labour migration have been smaller than what policymakers and experts expected, before the first enlargement in 2004. In relation to the total population, the influx of labour migrants from the new EU member states, particularly from Poland and the Baltic states, was larger to Norway, Iceland and Denmark than to Sweden in the first years after accession. These national differences are related to the fact that labour migration is strongly affected by the demand for labour on the labour market, and the fact that wage levels are considerably higher in Norway and Denmark than in Sweden (Berge et al. 2009: 16, 61­64; Dølvik & Eldring 2008: 91­96). As regards the Swedish case and the immigration structure in the early 2000s, figures from the Swedish Migration Board show that between 2000 and 2004, 116,330 (47 per cent) permanent residence permits were granted for family reunion reasons. Around 39,580 (17 per cent) went to refugees. Accordingly, almost 156,000 individuals (64 per cent) received a permanent residence permit, primarily not Table 1. Permanent residence permits granted in Sweden 2000­2004 Reasons Relatives EU/EES Refugees Guest students Relatives of refugees Children of adoption Labour market reasons In total Numbers 96,208 46,408 39,580 23,177 20,122 4,110 1,806 231,411 Share (%) 40 23 17 10 7 2 1 100 Source: Figures from the Swedish Migration Board (SOU 2005: 50: 112). on grounds related to labour market or education. A total of 1,806 individuals (1 per cent) from non-European countries were granted a permanent residence permit for labour market reasons. Additionally, a substantial share of individuals receiving a permanent residence permit due to EU/EES agreements arrived in Sweden primarily for labour market reasons. In the early 2000s the Swedish migration policy that governed labour migration from non-EU countries could be characterised as state-coordinated and restrictive. Non-EU citizens could almost only migrate to Sweden for purposes of employment in order to fill short-term labour market gaps. Figures from the Swedish Migration Board show that between 2000 and 2004, an average of only 361 non-EU citizens per year received permanent residency for labour market reasons. A significantly greater number of non-EU citizens, with an average of 7,380 per year, were admitted to enter Sweden on temporary permits between 2000 and 2004. In these instances, permits were generally valid for one year at a time, and were not granted unless the local or regional labour market board could certify that the opening vacancy could not be filled by a Swedish or EU citizen. Limited opportunities for permit extensions existed, and such extensions could not form the basis of a claim for permanent residency. Applicants had to demonstrate that they had a written job offer, the relevant trade union must have given its support for the proposed hire, a minimum salary of SEK 13,000 per month must have been offered, and housing must have been arranged. Applications had to be submitted from abroad and migrants were not allowed to enter Sweden until the application was approved. Temporary work permits were both sector- and employer-specific, and temporary workers could not switch employers or profession (SOU 2005: 50: 201­216). This rather restrictive admission policy had its roots in the events of the mid and late 1960s, when the number of labour migrants from Yugoslavia, Greece and Turkey arriving in Sweden on tourist visas increased greatly between 1964 and 1967, nearly doubling compared to figures between 1960 and 1964. The increased immigration and the subsequent communication and language problems on the shop floors contributed to debate within the trade union movement about the economic and social consequences of labour migration. LO requested a regulation of the non-Nordic immigration, and special measures in order to facilitate the process of `adaptation' of immigrants to Swedish society (Johansson 2008: 170­171). Both LO and SAP expressed concern that the liberal immigration policy, in place since 1954, threatened wage levels for Swedish workers. LO officials argued against a situation where those employers who avoided the payment of higher wages could instead recruit migrant workers with the help of AMS and a liberal immigration policy. In LO's opposition to the liberal immigration policy, the discussions focused on how an unregulated labour migration could threaten central features of Swedish labour market policies and block labour market access for groups that have traditionally remained outside the Swedish workforce. LO argued that the recruitment of migrant workers, particularly to low-wage sectors, could delay structural transformations within industry and thereby counteract policies whose purpose was to improve the positions of low-wage workers. In the same way, LO stressed that unregulated labour migration was at odds with policies intended to improve overall workforce participation rates, particularly to policy efforts designed to encourage workers from the less economically dynamic northern parts of Sweden to relocate to southern regions experiencing labour shortages. A concern within LO was that migrant workers were likely to seek employment in southern regions where labour was in high demand, but with existing housing shortages. As such, there were fears that competition between migrant and indigenous workers for scarce housing in regions with labour shortages would undermine efforts to increase the mobility of the indigenous workforce. Another potential conflict of LO's concern was whether migrant workers on the one hand or married women, elderly and the `partially disabled' on the other hand ought to be given priority as a strategy to maintain a steady supply of labour. A further potential downside to continued unregulated labour migration was also noted, as it was argued that labour migrants were more likely to place greater overall strain on societal welfare resources than would indigenous groups. As a consequence of these concerns, LO argued that labour migration should take place under regulated and organised forms. Its main argument was that immigration should be `adapted' to the ups and downs of the labour market and with consideration for the potential of society to take good care of its new citizens and give them equal social conditions (Johansson 2008; Lundh 1994). Indeed, much of LO's argumentation regarding the negative effects of unregulated labour migration on Swedish labour market and social policies was also present in a parliamentary report in 1967 and in the SAP government's proposition in 1968 that manifested a policy shift in favour of a state-coordinated labour migration policy (Regeringens proposition 1968: 142; SOU 1967: 18; cf. Johansson 2008). Thus, the policy strategy chosen in 1967­1968 was to emphasise that unregulated labour migration and liberal immigration policy were in conflict with Swedish labour market policy goals of increasing workforce participation rates and attaining full employment. This position remained central in Sweden's policy stance on labour migration into the early 2000s. The admission of a foreign workforce continued to be rejected in favour of an active labour market policy that gave priority to mobilisation of indigenous labour reserves. In determining those job categories where exceptions were allowed, tripartite consultation among AMS, representatives of trade unions and employers was required (Bucken-Knapp 2009; SOU 2006: 87). SN's drive for migration policy market-liberal labour According to the VoC literature, employers are likely to have their policy preferences conditioned by the specific variety of capitalism that they inhabit. Accordingly, Swedish employers should prefer the maintenance of labour migration policies that are broadly consistent with the workings of the coordinated market economy. Broadly speaking, employers should support a continued role for employers, trade unions and labour market boards in the granting of work permits, and the labour migration movements should be structured so as to not undermine core economic and labour market policy goals of the Swedish political economy. However, from the early 2000s until late 2008, Swedish employers organised within SN waged a campaign to ease the restrictions associated with Sweden's coordinated labour migration policy and to introduce a market-liberal approach to labour migration. As I will argue further in the analysis, in many ways SN's market-liberal policy preferences for labour migration correspond to the employer organisation's liberal agenda in other neighbouring policy areas. In December 2001, Bijan Fahimi, a board member of SN, authored a report (Fahimi 2001) for the employers' association sketching how an ageing Swedish workforce, coupled with ongoing labour shortages, made the resumption of labour migration important. Nevertheless, Fahimi's call to open the Swedish labour market to non-EU labour migration was also marked by a critique of the current practice in which local labour market boards served a gate-keeping function with regard to the entry of a non-EU workforce. Fahimi wanted to end the state-coordinated labour migration policy, and instead he preferred to allow firms to both decide and manage themselves regarding the competency they required. Another report by two SN officials in July the following year (Ekenger & Wallen 2002) proposed a revision of Swedish labour migration policy in which consultation with unions over work permits would no longer occur, and wherein local labour market boards would no longer be allowed to limit labour migrants to certain employment sectors: It is only the individual employer who will, and can, decide which competence is needed for the firm, and who can evaluate whether an applicant meets the stated criteria [...] The principle for labour migration should be the same as for all other recruiting, that is to say that companies that recruit shall get to decide what types of knowledge and competence they require. This should apply in all branches and sectors. To an ever-increasing extent, firms are looking for people with competence and experience that fit with precisely that company's specific profile. It is therefore not possible to limit labour migration to specific occupations or educations (Ekenger & Wallen 2002: 20, author's translation). Presenting details of the employers' vision for a market-liberal labour migration policy, Ekenger and Wallen proposed that non-EU citizens would be allowed to enter Sweden for a three-month period to conduct a job search; that upon receipt of a job offer, non-EU citizens would immediately be able to submit an application and would not be required to return to the home country first, that work permits would not be limited to a specific occupation or employer; and that non-EU citizens who worked in Sweden for a minimum of three years would have the possibility of a permanent residence permit (Ekenger & Wallen 2002: 4­5). SN's proposals called for a separation of labour migration from the regulated field of Swedish labour market policy, and proposed its reconstitution in a market-liberal form, as a private relationship between employer and employee without the involvement of state regulating institutions. Of particular importance in SN's proposals regarding reformation of the labour migration policy was that employers would have the absolute mandate to determine whether a potential immigrant was appropriate for a given job opening. This change would effectively remove any actors other than employers from the decision-making process regarding work permits: trade unions would no longer be solicited for input, nor would regional and local labour market boards be asked to provide information on labour market conditions. A report by SN lobbyist Theodor Paues (2003) underscored the employers' opposition to a state-coordinated labour migration policy. Paues described the SN reform proposals as representing a `decentralised and individual' model of labour migration, in which `there is no need for a centralised test of shortages or coordination of recruitment from other countries. Rather, every company could locally evaluate its recruiting needs, and if necessary, could search for co-workers in other countries' (Paues 2003: 7, author's translation). Paues and SN argued that this model of market-liberal labour migration serves the interests of Swedish employers in that `companies themselves can decide what type of co-workers they need, without having to go through a detour via AMS or any other authority' (Paues 2003: 7, author's translation; cf. SN 2006). In March 2008, the bourgeois government, which had taken office after the 2006 elections in Sweden, reached an agreement with the Green Party to propose a new system for labour migration from outside the EU, in which the decision-making process regarding work permits was undertaken by employers and did not involve the labour market boards (Dagens Eko, 27 March 2008). The government stated in its proposition to parliament that the current regulation was unsatisfactory and that the individual employer had the best knowledge about the need for recruiting employees. The government proposed that potential migrants wanting residence in Sweden for labour market purposes had to demonstrate that they had received a job offer before entering Sweden and that wages and other labour regulations were in accordance with collective agreements. It was also suggested that guest students should be able to apply for a work permit from within Sweden, and that asylum seekers who had been denied a residence permit for refugee reasons should be allowed to apply for a work permit, given that the person had already worked for at least six months in Sweden and had the offer of a job for at least a year. Residence permits could be revoked after three months if a person lost his or her position and was unable to find a new one. The government argued that the decision-making process regarding work permits and residence should move from AMS to the Swedish Migration Board and be based on the view of the employer. It was also thought that the Migration Board should not assess the question of the need for labour, but instead monitor the preference for EU and EES citizens in order to make sure that wages and working conditions conformed to collective agreements. Another proposal was that trade unions should no longer be involved in the decision-making process regarding work permits, but should be given the opportunity to comment on wages and other aspects of the employment contract if the employer did not provide adequate information to the Migration Board (Regeringens proposition 2007/08: 147). The proposition was discussed in parliament in November 2008 and parliament decided to adopt it, which meant that the state coordinated regulations concerning assessment about the need for labour migration were abolished (Riksdagens protokoll 2008/09: 26). Hence, in contrast to what would be expected in the VoC literature, Swedish employers have preferred a departure from the practices of coordination and regulation that have been central to Swedish labour migration policy since the late 1960s. The employers in SN have also been influential in the lobbying process in relation to the bourgeois government which came to governmental power after the elections in 2006. The main principles in SN's proposals of a reformed labour migration policy also became implemented in governmental policy in late 2008. Certainly, it remains an empirical question as to whether the implementation of a market-liberal labour migration policy would have broader effects that could spread to the underpinnings of the Swedish CME. Yet, SN's policy preferences on labour migration are consonant with the organisation's market-liberal policy orientation more broadly and in relation to other policy areas. Since SN's forerunner SAF in the beginning of the 1990s retreated from the tri-partite corporatist institutions and modes of political interaction in Sweden, the employer's organisation has gradually pursued a liberalistic orientation in several policy areas. SN has accordingly proposed deregulations of labour market policy, labour regimes and collective bargaining (Lindvall & Sebring 2006; Lindvert 2006; Rothstein & Bergström 1999). Besides, as also discussed by Berge et al. (2009), SN's decisive support of the Latvian employer in the infected and wellknown Laval/Vaxholm case, and a follow-up proposal to debilitate the union's right to conflict actions demonstrates SN's diminished identification and support of the Swedish Model. SN is rather seeking orientation against a market-liberal model of the political economy in Sweden. Nevertheless, in the area of labour migration policy, the marketoriented character of SN's proposed and later implemented policy reform has evoked critique and suspicion from LO, which has preferred a state-coordinated labour migration policy since the 1960s (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994). LO's opposition to market-liberal labour migration policy In relation to the context of demographic changes with an ageing population and a long-term need of labour, LO has supported the employers' view regarding a future need of labour migration (Andersson & Pettersson 2003; LO 2000). SN, however, has advocated labour migration and emphasised that there is a lack of appropriately qualified labour in Sweden, whereas LO frequently has argued that in the shorter perspective the focus should be on filling vacancies by providing job opportunities for domestic reserves of unemployed, many of whom are immigrants, and individuals on disability leave, before giving priority to extensive labour migration (LO 2000, 2004, 2006). When it comes to the organisation of labour migration, LO has, in opposition to SN's calls for a market-liberal approach, expressed clear preferences for an unchanged state-coordinated system. In a report published in 2003, LO economists Dan Andersson and Thord Pettersson (2003) presented LO's preferences for a system in which AMS, unions, and employers all have different degrees of influence in the granting of work permits. These preferences were repeated in another LO report published in 2006, and LO argued that both AMS and trade unions would serve as influential gatekeepers, as their assessment of whether or not a labour shortage exists is thought to be decisive for the prospects of a permit being granted. As a consequence of this LO view, employers are cast in a supporting and information-giving role, as their influence is almost limited to starting the process by making initial offers of employment (LO 2006: 12­25; Andersson & Pettersson 2003: 38­41). LO also prefers a regulated labour migration policy towards non-EU citizens combined with measures granting substantial rights and freedom on the Swedish labour market to those migrant workers who are admitted. The unions prefer that non-EU citizens conduct their job search from abroad, coupled with a requirement that a genuine labour shortage must be documented by labour market boards. The access of nonEU citizens to the Swedish labour market would therefore be limited to those instances where employers could make contacts with migrants outside of Sweden, where labour market board and union officials were in agreement as to the existence of labour shortages, and where legally binding open-ended employment contracts were present. However, for those migrants who will be given access after these assessment procedures, LO has proposed generous working and social conditions while they are in Sweden: work permits either of a long duration or immediately permanent, and with no restrictions on labour market access and welfare state rights identical to those of existing Swedish residents (Andersson & Petterson 2003: 38­41; LO 2006: 12­25; LO 2008). According to Bucken-Knapp, LO's migration policy represents `plausible attempts to negotiate successfully the troubling balancing act of ensuring that a properly sized and skilled labour force can be had by Swedish employers', and yet doing so `in a way that is compatible with full employment goals and active labour market policy instruments central to the social democratic model' (Bucken-Knapp 2009: 150; cf. Johansson 2008). For LO a statecoordinated migration policy and strict entry control in different ways correlates with the main objectives and functions of trade unions: to control and restrict the supply of labour on the labour market and to defend the members' interests regarding wages, working conditions and welfare state rights. In different ways, LO looks upon migrant workers as a complement to the domestic workforce, and assigns them a supporting role which should be activated only when the domestic supply is shown to be insufficient (LO 2000, 2004, 2006). First, as migrants would lack the ability to conduct their job search on-site, a situation could not emerge where migrants would be tempted to accept wages and working conditions below collective agreement standards if their job-search visas neared expiration and no employment offers had been received (LO 2006: 12­21). Second, preventing the entry of migrants until an employment contract is received and a permit is granted satisfies a second concern that LO has: that non-EU labour migrants with no employment contract in hand would overstay their job-search visa and join the informal economy rather than leave Sweden. Thus, a central feature of LO's critique against the unregulated non-Nordic migration of the 1960s, in which foreign workers arrived in Sweden on tourist visas to conduct their job search, is that it generated a poor match of labour supply and demand, resulting in significant numbers of unemployed, homeless migrants living in camp-like conditions. LO understood then that the solution was to advocate `a more regulated migration' when confronted with the negative effects of `tourist migration', and the union confederation is convinced that a comparable system of labour migration would introduce a disruptive force on to the Swedish labour market again (Andersson & Pettersson 2003: 32, author's translation). Third, requiring that non-EU migrants be supplied with open-ended employment contracts increases job security and imposes higher costs on employers seeking to dismiss migrant workers than in situations where temporary contracts are used. Finally, maintaining the strong position of unions in the decision-making process of work permits function as a guarantee, from LO's point of view, that no admission of migrant workers will take place without taking the interests of unions into account (LO 2006: 16­21). In the eyes of LO, there is less risk involved in granting labour migrants permanent residency and full labour market access when regulation and control measures have been put into place in the initial phases of the migration process to ensure that migrants are unlikely to have a negative impact on existing domestic labour reserves. LO prefers a state-coordinated model, both in terms of the involvement of multiple actors in the decision-making process regarding work permits, and regarding migration policy measures guaranteeing that labour migration do not threaten social democratic policies intended to mobilise domestic labour reserves or allow employers to undermine conditions associated with collective bargaining agreements. These policies and institutional practices have been central features of the Swedish model. Accordingly, LO views market-liberal labour migration as disruptive to the workings of the Swedish CME. Conclusion This article has explored the extent to which the VoC approach can inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. While the VoC literature emphasises that firms, the state and its strategic allies will support reform measures thought to increase firm capacity, this case study has shown that LO has opposed SN's calls for a market-liberal labour migration policy which has been presented as serving the interest of employer preferences to secure a suitable skilled workforce. Rather, LO's preferences for a statecoordinated labour migration policy are grounded in a desire to ensure that the immigration of migrant workers, and the conditions under which migrant workers have access to Swedish society, will not be at odds with other instruments of economic policymaking in line with broad social democratic goals, in particular, an active labour market policy intended to mobilise domestic labour reserves. LO reports have expressed concern over the degree to which marketliberal labour migration policy may threaten central features of the Swedish model. The legacy and the image of the Swedish model, and not least the strong position of organised labour within this model, remains very important when LO evaluates and formulates economic and social policy reform proposals. The influential VoC volume by Hall and Soskice (2001) underscores that policies stand the greatest chance of achieving desired objectives when they are `incentive compatible'. LO may value maintaining incentive compatibility, but it does not appear to be guided by functionalist reasons to reinforce firm capacity or to secure better economic efficiency. Rather LO seems to prefer an incentive compatible labour migration policy in line with the workings of the Swedish CME, because it is best thought to preserve those economic and social policies that have guaranteed a strong position of organised labour and strengthened the living conditions of the working class within a capitalist economy (cf. Bucken-Knapp 2009; Johansson 2008). In contrast to the portrayal of employers in the VoC literature, and in previous studies by Menz (2008, 2010) of employer preferences in relation to migration policy, Swedish employers within SN have not sought to preserve a labour migration policy that is incentive compatible with institutional and policy features of the broader political economy. Furthermore, research into the decline of Swedish corporatism in the 1990s and 2000s has shown how employers, for strategic and ideological reasons, no longer identify their interest as being best served by corporatist political institutions (Lindvall & Sebring 2006; Lindvert 2006; Rothstein & Bergström 1999). It is not a primary aim of this article to assess whether the overall era of Swedish corporatism is ended or not. However, when it comes to labour migration policy one conclusion stands out in this regard. The defence of the broad Swedish model has been central for LO, but SN has not supported a continued administrative corporatism (cf. Bucken-Knapp 2009). The employers' struggle to strip unions and labour market boards of their influence in the decision-making process regarding work permits, as well as the decision by the bourgeois government to assign employers a decisive role over the entry of migrant workers, marks an important shift in this field of policymaking. In Swedish labour migration policy, corporatism now seems to have minimal significance and employers have actively sought its completion. These results regarding SN's market-liberal policy preferences on labour migration and the organisation's retreat from corporatism in this field of policymaking corresponds to SN's increasingly market-liberal policy agenda in the last two decades. Previous research studies have also demonstrated how SN's liberalistic policy orientation and retreat from corporatist modes of political interaction have been significant in other policy areas such as labour market policy, labour regimes and collective bargaining (Berge et al. 2009; Lindvall & Sebring 2006; Lindvert 2006). To sum up, this case study of the role of organised interests in Swedish labour migration policymaking underscores how economic and social policy reform reflects contradictory political interests between capital and labour, rather than the desire to maintain institutional stability as emphasised in influential VoC literature. However, despite these shortcomings, the VoC approach illuminates that labour migration policy is definitely embedded in a broader context of economic policies and institutional arrangements (cf. Bucken-Knapp 2009; Caviedes 2010a, 2010b; Menz 2008, 2010). The implications of a reformed labour migration policy can therefore modify the workings of labour markets, the power balance between capital and labour and the composition of the national political economy. Jesper Johansson is senior lecturer in social work at Linnaeus University in Växjö. His main research interests revolve around migration, working life, political economy and social policy. Recent key publications are `Så gör vi inte här i Sverige. Vi brukar göra så här': Retorik och praktik i LO:s invandrarpolitik 1945­1981 (`We actually don't do like that here in Sweden. We usually do like this': Rhetoric and Practices in LO's immigration policy 1945­1981, diss., Växjö University Press, 2008) and `Globala och lokala perspektiv på kvinnliga erfarenheter av migration: En diskussion om betydelsen av genusperspektiv och migrationssystemteori' (`Global and local perspectives on female experiences of migration. A discussion of the significance of gender perspectives and migration system theory') in Samhällshistoria i fokus: En festskrift till Lars Olsson om arbete, migration och kultur (History of society in focus: A festschrift to Lars Olsson about work, migration and culture, eds. Lars Berggren, Mats Greiff, Jesper Johansson, Johan Svanberg & Malin Thor, Big Bad Books, 2010). Acknowledgments I would like to acknowledge supportive comments from the participants in a research seminar at Malmö Institute for Studies of Migration, Diversity and Welfare (MIM), Malmö University, where I presented a draft of this article. Two anonymous reviewers are also acknowledged for their helpful comments. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Nordic Journal of Migration Research de Gruyter

Swedish Employers and Trade Unions, Varieties of Capitalism and Labour Migration Policies

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Abstract

This article explores the extent to which the varieties of capitalism (VoC) approach can inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. VoC scholars maintain that policymakers prefer reforms conforming to the national political economy. Employers are also thought to support policies incentivecompatible with the prevailing model of capitalism. The analysis presents a case that is partly at odds with the view of economic and social policy reform developed in the VoC approach. The analysis show that the Swedish Confederation of Enterprise prefers a market-liberal labour migration policy, while the Swedish Trade Union Confederation prefers state-coordinated labour migration policies compatible with central features of the Swedish coordinated model ­ active labour market policies and strong trade unions. Keywords VoC approach · organised interests · labour migration policy · SN, LO Received 3 October 2011 accepted 28 March 2012 Jesper Johansson* Linnaeus University, Växjö, Sweden Introduction Increased labour migration has been singled out in several European countries as a means to address the coming challenge of a rapidly ageing population and related issues of labour shortages and problems of maintaining funding for generous social services. Sweden stands out as a prime example regarding the urgency of these issues, and the rediscovered interest in labour migration among policymakers in the last 10­15 years. Demographic and labour market forecasts pointing to a sharply shrinking workforce in the immediate future have led to public discussion in Sweden about whether to reintroduce large-scale labour migration. Employers in the Swedish Confederation of Enterprise (SN) and bourgeois parties have advocated a more liberal migration policy to grant non-EU citizens access to the domestic labour market. The Social Democratic Labour Party (SAP) and the Trade Union Confederation (LO) have been more sceptical about the proposals to liberalise Sweden's labour migration policy. However, despite the fact that any debate over the potential value of changes in labour migration policies inevitably touches upon core issues associated with the politics of economic reform, few studies until recently have had a political-economy approach in the study of labour migration policymaking. As stated by Georg Menz and Alexander Caviedes (2010), much of the existing migration literature, especially in political science, has had a fairly state-centric view and has treated migration policy as an exclusive domain of governments. The political activities of non-state actors and individual institutions, such as employer and labour organisations in the case of this article, have been given less scholarly attention. Moreover, many contributions commit themselves exclusively to the subfield of migration studies and in doing so fail to take advantage of theories outside the migration field. For political-economy accounts of migration, one either has to go back to the 1970s (Castles & Kosack 1973; Piore 1979) or rely on the few accounts published since then (Caviedes 2010a, 2010b; Cole & Dales 1999; Freeman 2006; Menz 2008, 2010). As further contended by Menz and Caviedes, post-war immigration to Europe is rooted in economic migration, so `it seems clear that a broad survey of economic migration trends should be embedded within the larger discourse on the changing political economy of Europe and the world' (Menz & Caviedes 2010: 4). 2 The Swedish case of organised interests and labour migration policy reform: analytical perspectives I adopt a perspective that is influenced both by leading theories in comparative political economy and by previous work concerning the role of organised interests in migration studies. Hence, I explore the extent to which perspectives on policymaking within the varieties of capitalism (VoC) literature can fruitfully inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. The VoC * E-mail: jesper.johansson@lnu.se literature is thought to open up `substantial new perspectives on both economic and social policymaking', with proponents hypothesising that institutional change and policy reform within liberal market economies (LMEs) and coordinated market economies (CMEs) will generally be complementary to the broader pattern of coordination defining a given political economy (Hall & Soskice 2001: 45). The process of labour migration policy reform in Sweden is well-suited for exploring the explanatory power of this assumption about economic and social policymaking. Sweden is often characterised as a role model of a coordinated market economy in this literature, and therefore suits as a critical case. Furthermore, the debate about labour migration in Sweden has frequently centred on issues that are central in the VoC approach and in previous work on the role of employers in migration studies (Caviedes 2010a, 2010b; Menz 2008, 2010), for instance the desire of firms to secure a suitable skilled workforce, as well as patterns of coordination between social partners about wage and productivity levels. Finally, the debate about labour migration is important for a closely related discussion within comparative political economy regarding whether Sweden could still be regarded as a prime example of a corporatist political system (cf. Bucken-Knapp 2009). This article presents a case that is partly at odds with the view of economic and social policy reform developed in the VoC approach. A central argument of the VoC literature is that only economic policies complementary to the coordinating capacities embedded in the existing political economy will be effective policy choices. Such compatible policies are thought to be preferred by governments and their strategic allies in order to reinforce the capacities of firms and to ensure better economic performance (Hall & Soskice 2001). However, the analysis presented in this article shows that while LO has preferred a state-coordinated labour migration policy, it has not done so based on preferences for efficiency or goals related to economic performance. Rather, LO has feared that liberalisation, as preferred by employers in SN, would damage core features of the Swedish model, undermining the Swedish active labour market policy and weakening the Swedish trade union movement (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994; Lundqvist 2002). The Swedish case of labour migration policy highlights the degree to which political conflict between labour and capital remains a central feature of the economic and social policy reform process ­ a feature that is underdeveloped in much of the VoC literature, which has a rather functionalist character. The debate about labour migration between the social partners in Sweden underscores how battle lines mostly are sketched out on the basis of collective interests and not on the basis of a perceived contribution to maintaining institutional stability. The analysis relies on organisational reports and proposals from SN and LO, parliamentary minutes, committee motions and reports, and press material including releases, commentaries and statements made by officials of SN and LO. assess the analytical gains and deficits of the VoC literature for the study of Swedish labour migration policy reform. Thereafter, I complete the theoretical section by presenting a distinction between two broad ideal types of labour migration policy being debated in Sweden, market-liberal and state-coordinated. The article then shifts gears to the empirical section, first providing a brief overview of Swedish labour migration policy from the 1960s until the early 2000s. I then focus on the debate during the 2000s leading to a liberalisation shift in late 2008, when the Swedish government and parliament adopted a market-liberal approach to non-EU labour migration, allowing employers to hire freely from outside the EU. In the analysis of this debate, I discuss SN's proposals for a relaxation of the rules governing labour migration. In doing so I emphasise how the implementation of the employer preferences resulted in a largely market-based approach to migration, and ended the state-led coordination of work permit applications between the social partners and the Swedish Labour Market Board (AMS). Finally, I focus on the trade union response to these proposals and the liberal shift in policy, detailing how LO dismissed employer calls for reform. LO rather supported a labour migration policy that will neither undermine earlier economic policy efforts of SAP to achieve full employment, nor threaten the position of organised labour within the broader political framework of Swedish society. The concluding discussion addresses the implications of the Swedish case of labour migration policy reform for the analysis of economic and social policy reform in advanced capitalist economies. Social partners, labour migration policy preferences and models of capitalism Outline of the article This article proceeds as follows. I begin by outlining the theoretical contributions and discussing previous research relevant to this study on the preferences held by organised interests in relation to labour migration, and my assessment of this previous research. Then I present a summary of the VoC approach, focusing on the emphasis within this literature on the close links between economic policymaking and the prevailing national model of capitalism. I also The key factor in analysing labour migration policy is the involvement (or lack of involvement) of the social partners, whose influence over policy and its implementation is often shielded from public scrutiny (Freeman 1979). Studies have predominantly centred on the role of trade unions, who should oppose labour immigration because of its potential for lowering wages within regulated labour markets and providing alternative labour in times of conflict (Castles & Kosack 1973; Haus 2002). Thus, a recently developing body of research has shown that the labour movement during the last few decades in the context of globalisation has become more open to managed forms of labour immigration compared to a restrictive approach and substantial unregulated migration (Avci & McDonald 2000; Haus 2002; Krings 2010; Watts 2002). These studies reviewed thus far have had much to offer regarding the understanding of both trade unions' migration policy preferences and migration policy outcomes influenced by organised labour. Nevertheless, especially Leah Haus's (2002) and Julie Watts's (2002) globalisation-inspired thesis that increased economic globalisation has tipped organised labour away from a restrictive labour migration policy cannot be grafted successfully onto the particularities of the Swedish case. In relation to this study of the Swedish labour migration policy reform, Haus's and Watts's studies do not offer a compelling account of which policy reform alternatives organised labour has preferred, or how the migration policy should be structured regarding institutional arrangements. Haus's and Watts's studies also are confined to the US, France, Italy and Spain, national contexts where both organised labour and the welfare state have been comparatively weak. Neither Haus nor Watts consider how the presence of a well-developed welfare state may have any impact on the labour migration policy preferences of trade unions or allied Left parties. Therefore, there is uncertainty regarding how powerful trade unions will react to the prospect of increased labour migration, particularly in contexts like Sweden where the institutional structure of the political economy have historically been broadly supportive of organised labour's aims and of a strong welfare state. Accordingly, this study aims to complement previous research, in order to shed light on how an influential trade union movement like LO and a powerful employer organisation like SN in an advanced industrial country such as Sweden have developed their labour migration policy preferences. Though organised business played a key role in earlier Marxistinspired research during the 1970s and 1980s (Castles & Kosack 1973; Miles 1987; Piore 1979), rather little scholarly attention has been paid to the role of employer associations in migration studies in recent decades (exceptions are Caviedes 2010a, 2010b; Cerna 2009; Menz 2008, 2010). Both Menz (2008, 2010) and Caviedes (2010a, 2010b) have adopted a comparative-capitalisms approach in their studies of employer preferences in relation to migration policy. Especially Menz (2008, 2010) has argued that the interests of employers, both in general and in relation to migration policy, `are shaped by the particularities of the national production systems they are imbedded in' (Menz 2010: 25). Menz (2008, 2010) and Caviedes (2010a, 2010b) are both influenced by the VoC approach's understanding of varying employer preferences. Against this backdrop I will present a summary of the VoC approach and a critical assessment of the analytical advantages and weaknesses of this approach to the study of the Swedish labour migration policy reform process. The VoC approach has rapidly become central to the field of comparative political economy. The VoC literature contributes explanations of why, in the context of globalisation and neoliberalism, different capitalist political economies have not converged inevitably into one institutional form. Peter A. Hall and David Soskice (2001) argue that this lack of institutional convergence towards liberal capitalism can be accounted for by examining the functional relationship among institutions of the national economy. The authors adopt a firm-centred approach to political economy, and refer to firms as the `key agents of adjustment in the face of technological change or international competition' (Hall & Soskice 2001: 6). As the central agents, firms engage in relationships with other rational and strategic actors as a means of resolving coordination problems in five spheres of the political economy: industrial relations, vocational training and education, corporate governance, inter-firm relations, and relations between employers and employees. Based on the institutions devised to solve these coordination problems among competing actors, national economies can be placed into one of two broad categories, either LMEs or CMEs. In LMEs, firms coordinate their activities primarily via competitive market arrangements, while in CMSs, firms rely to a greater extent on non-market relationships to coordinate business relations (Hall & Soskice 2001). The emergence of these distinct institutional clusters is largely explained by the presence of institutional complementarities across different spheres. According to Hall and Soskice (2001), the resolution of a coordination problem in one sphere by either market or non-market means will increase the likelihood that a similar strategy will be adopted when facing coordination problems in other areas of the political economy. The VoC literature does not, however, simply address the question of accounting for sustained institutional differences among capitalist economies. This approach is also intended to account for the dynamics associated with economic policy reform in advanced industrialised economies. In general, a functionalist perspective on public policymaking is dominant in the influential VoC volume of Hall and Soskice (2001), with policy measures portrayed as measures intended to maintain and support the continued workings of the broader institutional environment. Hall and Soskice specify that policies stand the greatest chance of achieving desired objectives when they are `incentive compatible': successful public policies are those that act as a complement to the prevailing institutional cluster in the national political economy, while unsuccessful policies are in friction with the logic of coordination predominantly operative in the five spheres. The importance of compatibility between spheres of the political economy and policy reform is also thought to be significant for actors' policy preferences. Focusing especially on employers, Margarita Estevez-Abe, Torben Iversen and David Soskice (2001) have emphasised how the design of the political economy can shape social policy preferences, in that `rational employers who pursue distinctive product market strategies can benefit from welfare programs and policies that favour their product strategy' (EstevezAbe, Iversen & Soskice 2001: 160). Stuart Wood (2001) also makes a similar point in his analysis of economic policy reform, arguing that employers' preferences are `derived from the properties of CMEs and LMEs' (Wood 2001: 249) and further noting that `employers will look to public policy to maintain and reinforce the variety of institutional competitive advantage upon which they rely' (Wood 2001: 251). Critics of the VoC approach have challenged this functionalist interpretation of institutional reform and policymaking. Chris Howell (2003) has argued that the VoC approach sees states acting `largely at the behest of employers', and presenting a picture that `employer preferences determine the content of policy'. He also stresses that, in the VoC approach, states do not `appear to have interests distinguishable from those of employers, nor do they have the capacity to act independently, still less against employer interests' (Howell 2003: 121). Related to this criticism is the charge that the VoC approach stresses the importance of continuity more than institutional and policy change. This emphasis in the core VoC literature on institutional complementarities and supporting public policies has led critics to argue that there is a lack of discussion of cases `where the hallmark self-reinforcing equilibrium is lacking, and where there are signs of institutional and policy change that could bring about shifts from one mode to another' (Bucken-Knapp 2009: 20­21). Thus, the VoC approach contributes to the understanding of the Swedish labour migration policy reform process in positive ways. In the migration literature, shifts in the degree of restrictiveness or openness of a state's labour migration policy have often been explained by references to changes in the national unemployment rates (Meyers 2004), and the degree to which affected parties mobilise and engage in interest group politics (Freeman 1995, 2002, 2006). Institutions have also been assigned a significant role, structuring the access that domestic groups have to migration policymakers and to relevant actors in legislatures, bureaucracies and labour market boards (Geddes 2003; Hollifield 1992; Lahav & Guiraudon 2006). Nevertheless, as also earlier stressed by Gregg Bucken-Knapp (2009), little attention has been paid to the question of whether and how functional complements among institutions may themselves contribute to the preferences of immigration policymakers. Hence, given the tight nexus between labour migration policy and many features of the national political economy, it appears reasonable to assume that the logic of institutional and policy complementarities embedded in the VoC approach can make an important contribution to the analysis of labour migration policy (cf. Caviedes 2010a, 2010b; Menz 2008, 2010). Undoubtedly, a strength of the VoC approach is that it focuses attention on the importance of incentive compatibility when considering the interrelationship among institutions and policies of the political economy. Indeed, this is important for the study of labour migration, where few recent studies have sought to examine how migration policy reform reflects the desire of policymakers and other interest groups to structure labour migration policy in a manner consistent with the workings of broader economic and social policies (important exceptions are Bucken-Knapp 2009; Caviedes 2010a, 2010b; Menz 2008, 2010). Moreover, labour migration can have substantial effects on the economy and polity of the receiving country, including wage levels, union density rates, unemployment insurance and other social policies, and the extent to which migrant workers are able to participate in political life (Bucken-Knapp 2009; Castles & Kosack 1973; Menz 2008; Menz & Caviedes 2010). As such, the study of labour migration focuses on concerns that have been of central importance in the VoC approach: the study of industrial relations, labour market policy, welfare state reform, and prerequisites for public policymaking. However, the case study of the role of organised interests in the Swedish labour migration policy reform process will also lend further empirical support to the criticism of the VoC approach and its functionalist character in two related ways. First, I will show that LO has opted to maintain a labour migration policy that the confederation regards as CME-consistent, not for functionalist reasons per se, but out of concern over the implications of a market-liberal policy shift for central features of the Swedish model (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994; Lundqvist 2002). Second, the employers in SN have played a central role in the reform process of the Swedish labour migration policy, although it would be difficult to characterise SN's labour migration policy preferences as consistent with the workings of the Swedish CME. Rather, SN has proposed policy reforms that emphasised policies and institutions of a LME, and not features of the Swedish model. migration policy can stipulate that social benefits for labour migrants are to be phased in over a number of years, providing incentives for migrants to stay active on the labour market. On the other hand, policymakers may instead implement what can be considered as a state-coordinated labour migration policy. Concepts such as corporatism and neo-corporatism are also used to refer to these institutional structures of policymaking, where interest organisations are involved in decision-making and implementation (cf. Williamson 1989). This ideal type of policy is characterised by a state-led coordination capacity, and the inclusion of multiple actors in the work permit decision process, with employers, unions and labour market board officials having influence over whether permits should be approved or rejected. Immigrants may be admitted on either permanent or temporary permits. Labour migrants who are admitted on temporary work permits will generally be restricted to employment in specific sectors of the labour market, and only granted access after it has been determined that domestic labour shortages exist. There are limited possibilities for temporary work permit holders to move freely throughout the labour market, and they will generally be expected to leave the country upon completion, or loss, of a job. Social benefits may also be limited for temporary migrants. The initial granting of permanent residence permits for purposes of labour migration will also be dependent upon the existence of labour shortages in general, or specific skill shortages. As permanent residents may not have labour market restrictions placed upon them, employers can be required to offer open-ended contracts in order to decrease the possibilities that migrants will find movement throughout the labour market an attractive option. Social benefits will generally be provided to labour migrants with a permanent residence permit in the same manner as they are to national citizens. Given that labour shortages can be either partial or general, both small- and large-scale immigration are possible under state-coordinated labour migration. Market-liberal or state-coordinated labour migration policy Swedish labour migration policy: a historical background to the policy reform debate during the 2000s As the analysis of the Swedish case will show, a central feature of the Swedish debate has been the institutional arrangements in respect of how to organise labour migration. Here, two broad ideal types of labour migration policy can be outlined. On the one hand, policymakers can opt for a strategy of market-liberal labour migration, in which employers are granted control over work permit approvals. This market-based form of labour migration casts the hiring needs of firms as the principal determinant of the granting of work permits. The scale of labour migration will largely result from the demand for labour by various employers. Furthermore, potential migrants are not restricted to a given occupation sector and may pursue possible employment opportunities across the labour market without state-imposed restrictions reflecting broader employment trends or economic policy goals. Given that employer needs for labour are central to a market-driven, liberal labour migration policy, labour migrants who find themselves unemployed do not have to leave the destination country immediately. As labour migrants possess unrestricted labour market access, they are free to pursue all employment possibilities while in possession of a valid work permit. Provisions may exist for temporary work permits to be converted into the permanent residence permits after a certain period of continuous employment. Finally, to pursue a flexible labour market, liberal From the 1970s until the 2000s, immigration to the Nordic countries has been dominated by family-related migration and refugee migration. The EU enlargement eastwards in 2004 and 2007 has represented a new phase concerning increased labour migration to the Nordic countries. In Sweden the proportions of this particular form of intra-EU labour migration have been smaller than what policymakers and experts expected, before the first enlargement in 2004. In relation to the total population, the influx of labour migrants from the new EU member states, particularly from Poland and the Baltic states, was larger to Norway, Iceland and Denmark than to Sweden in the first years after accession. These national differences are related to the fact that labour migration is strongly affected by the demand for labour on the labour market, and the fact that wage levels are considerably higher in Norway and Denmark than in Sweden (Berge et al. 2009: 16, 61­64; Dølvik & Eldring 2008: 91­96). As regards the Swedish case and the immigration structure in the early 2000s, figures from the Swedish Migration Board show that between 2000 and 2004, 116,330 (47 per cent) permanent residence permits were granted for family reunion reasons. Around 39,580 (17 per cent) went to refugees. Accordingly, almost 156,000 individuals (64 per cent) received a permanent residence permit, primarily not Table 1. Permanent residence permits granted in Sweden 2000­2004 Reasons Relatives EU/EES Refugees Guest students Relatives of refugees Children of adoption Labour market reasons In total Numbers 96,208 46,408 39,580 23,177 20,122 4,110 1,806 231,411 Share (%) 40 23 17 10 7 2 1 100 Source: Figures from the Swedish Migration Board (SOU 2005: 50: 112). on grounds related to labour market or education. A total of 1,806 individuals (1 per cent) from non-European countries were granted a permanent residence permit for labour market reasons. Additionally, a substantial share of individuals receiving a permanent residence permit due to EU/EES agreements arrived in Sweden primarily for labour market reasons. In the early 2000s the Swedish migration policy that governed labour migration from non-EU countries could be characterised as state-coordinated and restrictive. Non-EU citizens could almost only migrate to Sweden for purposes of employment in order to fill short-term labour market gaps. Figures from the Swedish Migration Board show that between 2000 and 2004, an average of only 361 non-EU citizens per year received permanent residency for labour market reasons. A significantly greater number of non-EU citizens, with an average of 7,380 per year, were admitted to enter Sweden on temporary permits between 2000 and 2004. In these instances, permits were generally valid for one year at a time, and were not granted unless the local or regional labour market board could certify that the opening vacancy could not be filled by a Swedish or EU citizen. Limited opportunities for permit extensions existed, and such extensions could not form the basis of a claim for permanent residency. Applicants had to demonstrate that they had a written job offer, the relevant trade union must have given its support for the proposed hire, a minimum salary of SEK 13,000 per month must have been offered, and housing must have been arranged. Applications had to be submitted from abroad and migrants were not allowed to enter Sweden until the application was approved. Temporary work permits were both sector- and employer-specific, and temporary workers could not switch employers or profession (SOU 2005: 50: 201­216). This rather restrictive admission policy had its roots in the events of the mid and late 1960s, when the number of labour migrants from Yugoslavia, Greece and Turkey arriving in Sweden on tourist visas increased greatly between 1964 and 1967, nearly doubling compared to figures between 1960 and 1964. The increased immigration and the subsequent communication and language problems on the shop floors contributed to debate within the trade union movement about the economic and social consequences of labour migration. LO requested a regulation of the non-Nordic immigration, and special measures in order to facilitate the process of `adaptation' of immigrants to Swedish society (Johansson 2008: 170­171). Both LO and SAP expressed concern that the liberal immigration policy, in place since 1954, threatened wage levels for Swedish workers. LO officials argued against a situation where those employers who avoided the payment of higher wages could instead recruit migrant workers with the help of AMS and a liberal immigration policy. In LO's opposition to the liberal immigration policy, the discussions focused on how an unregulated labour migration could threaten central features of Swedish labour market policies and block labour market access for groups that have traditionally remained outside the Swedish workforce. LO argued that the recruitment of migrant workers, particularly to low-wage sectors, could delay structural transformations within industry and thereby counteract policies whose purpose was to improve the positions of low-wage workers. In the same way, LO stressed that unregulated labour migration was at odds with policies intended to improve overall workforce participation rates, particularly to policy efforts designed to encourage workers from the less economically dynamic northern parts of Sweden to relocate to southern regions experiencing labour shortages. A concern within LO was that migrant workers were likely to seek employment in southern regions where labour was in high demand, but with existing housing shortages. As such, there were fears that competition between migrant and indigenous workers for scarce housing in regions with labour shortages would undermine efforts to increase the mobility of the indigenous workforce. Another potential conflict of LO's concern was whether migrant workers on the one hand or married women, elderly and the `partially disabled' on the other hand ought to be given priority as a strategy to maintain a steady supply of labour. A further potential downside to continued unregulated labour migration was also noted, as it was argued that labour migrants were more likely to place greater overall strain on societal welfare resources than would indigenous groups. As a consequence of these concerns, LO argued that labour migration should take place under regulated and organised forms. Its main argument was that immigration should be `adapted' to the ups and downs of the labour market and with consideration for the potential of society to take good care of its new citizens and give them equal social conditions (Johansson 2008; Lundh 1994). Indeed, much of LO's argumentation regarding the negative effects of unregulated labour migration on Swedish labour market and social policies was also present in a parliamentary report in 1967 and in the SAP government's proposition in 1968 that manifested a policy shift in favour of a state-coordinated labour migration policy (Regeringens proposition 1968: 142; SOU 1967: 18; cf. Johansson 2008). Thus, the policy strategy chosen in 1967­1968 was to emphasise that unregulated labour migration and liberal immigration policy were in conflict with Swedish labour market policy goals of increasing workforce participation rates and attaining full employment. This position remained central in Sweden's policy stance on labour migration into the early 2000s. The admission of a foreign workforce continued to be rejected in favour of an active labour market policy that gave priority to mobilisation of indigenous labour reserves. In determining those job categories where exceptions were allowed, tripartite consultation among AMS, representatives of trade unions and employers was required (Bucken-Knapp 2009; SOU 2006: 87). SN's drive for migration policy market-liberal labour According to the VoC literature, employers are likely to have their policy preferences conditioned by the specific variety of capitalism that they inhabit. Accordingly, Swedish employers should prefer the maintenance of labour migration policies that are broadly consistent with the workings of the coordinated market economy. Broadly speaking, employers should support a continued role for employers, trade unions and labour market boards in the granting of work permits, and the labour migration movements should be structured so as to not undermine core economic and labour market policy goals of the Swedish political economy. However, from the early 2000s until late 2008, Swedish employers organised within SN waged a campaign to ease the restrictions associated with Sweden's coordinated labour migration policy and to introduce a market-liberal approach to labour migration. As I will argue further in the analysis, in many ways SN's market-liberal policy preferences for labour migration correspond to the employer organisation's liberal agenda in other neighbouring policy areas. In December 2001, Bijan Fahimi, a board member of SN, authored a report (Fahimi 2001) for the employers' association sketching how an ageing Swedish workforce, coupled with ongoing labour shortages, made the resumption of labour migration important. Nevertheless, Fahimi's call to open the Swedish labour market to non-EU labour migration was also marked by a critique of the current practice in which local labour market boards served a gate-keeping function with regard to the entry of a non-EU workforce. Fahimi wanted to end the state-coordinated labour migration policy, and instead he preferred to allow firms to both decide and manage themselves regarding the competency they required. Another report by two SN officials in July the following year (Ekenger & Wallen 2002) proposed a revision of Swedish labour migration policy in which consultation with unions over work permits would no longer occur, and wherein local labour market boards would no longer be allowed to limit labour migrants to certain employment sectors: It is only the individual employer who will, and can, decide which competence is needed for the firm, and who can evaluate whether an applicant meets the stated criteria [...] The principle for labour migration should be the same as for all other recruiting, that is to say that companies that recruit shall get to decide what types of knowledge and competence they require. This should apply in all branches and sectors. To an ever-increasing extent, firms are looking for people with competence and experience that fit with precisely that company's specific profile. It is therefore not possible to limit labour migration to specific occupations or educations (Ekenger & Wallen 2002: 20, author's translation). Presenting details of the employers' vision for a market-liberal labour migration policy, Ekenger and Wallen proposed that non-EU citizens would be allowed to enter Sweden for a three-month period to conduct a job search; that upon receipt of a job offer, non-EU citizens would immediately be able to submit an application and would not be required to return to the home country first, that work permits would not be limited to a specific occupation or employer; and that non-EU citizens who worked in Sweden for a minimum of three years would have the possibility of a permanent residence permit (Ekenger & Wallen 2002: 4­5). SN's proposals called for a separation of labour migration from the regulated field of Swedish labour market policy, and proposed its reconstitution in a market-liberal form, as a private relationship between employer and employee without the involvement of state regulating institutions. Of particular importance in SN's proposals regarding reformation of the labour migration policy was that employers would have the absolute mandate to determine whether a potential immigrant was appropriate for a given job opening. This change would effectively remove any actors other than employers from the decision-making process regarding work permits: trade unions would no longer be solicited for input, nor would regional and local labour market boards be asked to provide information on labour market conditions. A report by SN lobbyist Theodor Paues (2003) underscored the employers' opposition to a state-coordinated labour migration policy. Paues described the SN reform proposals as representing a `decentralised and individual' model of labour migration, in which `there is no need for a centralised test of shortages or coordination of recruitment from other countries. Rather, every company could locally evaluate its recruiting needs, and if necessary, could search for co-workers in other countries' (Paues 2003: 7, author's translation). Paues and SN argued that this model of market-liberal labour migration serves the interests of Swedish employers in that `companies themselves can decide what type of co-workers they need, without having to go through a detour via AMS or any other authority' (Paues 2003: 7, author's translation; cf. SN 2006). In March 2008, the bourgeois government, which had taken office after the 2006 elections in Sweden, reached an agreement with the Green Party to propose a new system for labour migration from outside the EU, in which the decision-making process regarding work permits was undertaken by employers and did not involve the labour market boards (Dagens Eko, 27 March 2008). The government stated in its proposition to parliament that the current regulation was unsatisfactory and that the individual employer had the best knowledge about the need for recruiting employees. The government proposed that potential migrants wanting residence in Sweden for labour market purposes had to demonstrate that they had received a job offer before entering Sweden and that wages and other labour regulations were in accordance with collective agreements. It was also suggested that guest students should be able to apply for a work permit from within Sweden, and that asylum seekers who had been denied a residence permit for refugee reasons should be allowed to apply for a work permit, given that the person had already worked for at least six months in Sweden and had the offer of a job for at least a year. Residence permits could be revoked after three months if a person lost his or her position and was unable to find a new one. The government argued that the decision-making process regarding work permits and residence should move from AMS to the Swedish Migration Board and be based on the view of the employer. It was also thought that the Migration Board should not assess the question of the need for labour, but instead monitor the preference for EU and EES citizens in order to make sure that wages and working conditions conformed to collective agreements. Another proposal was that trade unions should no longer be involved in the decision-making process regarding work permits, but should be given the opportunity to comment on wages and other aspects of the employment contract if the employer did not provide adequate information to the Migration Board (Regeringens proposition 2007/08: 147). The proposition was discussed in parliament in November 2008 and parliament decided to adopt it, which meant that the state coordinated regulations concerning assessment about the need for labour migration were abolished (Riksdagens protokoll 2008/09: 26). Hence, in contrast to what would be expected in the VoC literature, Swedish employers have preferred a departure from the practices of coordination and regulation that have been central to Swedish labour migration policy since the late 1960s. The employers in SN have also been influential in the lobbying process in relation to the bourgeois government which came to governmental power after the elections in 2006. The main principles in SN's proposals of a reformed labour migration policy also became implemented in governmental policy in late 2008. Certainly, it remains an empirical question as to whether the implementation of a market-liberal labour migration policy would have broader effects that could spread to the underpinnings of the Swedish CME. Yet, SN's policy preferences on labour migration are consonant with the organisation's market-liberal policy orientation more broadly and in relation to other policy areas. Since SN's forerunner SAF in the beginning of the 1990s retreated from the tri-partite corporatist institutions and modes of political interaction in Sweden, the employer's organisation has gradually pursued a liberalistic orientation in several policy areas. SN has accordingly proposed deregulations of labour market policy, labour regimes and collective bargaining (Lindvall & Sebring 2006; Lindvert 2006; Rothstein & Bergström 1999). Besides, as also discussed by Berge et al. (2009), SN's decisive support of the Latvian employer in the infected and wellknown Laval/Vaxholm case, and a follow-up proposal to debilitate the union's right to conflict actions demonstrates SN's diminished identification and support of the Swedish Model. SN is rather seeking orientation against a market-liberal model of the political economy in Sweden. Nevertheless, in the area of labour migration policy, the marketoriented character of SN's proposed and later implemented policy reform has evoked critique and suspicion from LO, which has preferred a state-coordinated labour migration policy since the 1960s (cf. Bucken-Knapp 2009; Johansson 2008; Lundh 1994). LO's opposition to market-liberal labour migration policy In relation to the context of demographic changes with an ageing population and a long-term need of labour, LO has supported the employers' view regarding a future need of labour migration (Andersson & Pettersson 2003; LO 2000). SN, however, has advocated labour migration and emphasised that there is a lack of appropriately qualified labour in Sweden, whereas LO frequently has argued that in the shorter perspective the focus should be on filling vacancies by providing job opportunities for domestic reserves of unemployed, many of whom are immigrants, and individuals on disability leave, before giving priority to extensive labour migration (LO 2000, 2004, 2006). When it comes to the organisation of labour migration, LO has, in opposition to SN's calls for a market-liberal approach, expressed clear preferences for an unchanged state-coordinated system. In a report published in 2003, LO economists Dan Andersson and Thord Pettersson (2003) presented LO's preferences for a system in which AMS, unions, and employers all have different degrees of influence in the granting of work permits. These preferences were repeated in another LO report published in 2006, and LO argued that both AMS and trade unions would serve as influential gatekeepers, as their assessment of whether or not a labour shortage exists is thought to be decisive for the prospects of a permit being granted. As a consequence of this LO view, employers are cast in a supporting and information-giving role, as their influence is almost limited to starting the process by making initial offers of employment (LO 2006: 12­25; Andersson & Pettersson 2003: 38­41). LO also prefers a regulated labour migration policy towards non-EU citizens combined with measures granting substantial rights and freedom on the Swedish labour market to those migrant workers who are admitted. The unions prefer that non-EU citizens conduct their job search from abroad, coupled with a requirement that a genuine labour shortage must be documented by labour market boards. The access of nonEU citizens to the Swedish labour market would therefore be limited to those instances where employers could make contacts with migrants outside of Sweden, where labour market board and union officials were in agreement as to the existence of labour shortages, and where legally binding open-ended employment contracts were present. However, for those migrants who will be given access after these assessment procedures, LO has proposed generous working and social conditions while they are in Sweden: work permits either of a long duration or immediately permanent, and with no restrictions on labour market access and welfare state rights identical to those of existing Swedish residents (Andersson & Petterson 2003: 38­41; LO 2006: 12­25; LO 2008). According to Bucken-Knapp, LO's migration policy represents `plausible attempts to negotiate successfully the troubling balancing act of ensuring that a properly sized and skilled labour force can be had by Swedish employers', and yet doing so `in a way that is compatible with full employment goals and active labour market policy instruments central to the social democratic model' (Bucken-Knapp 2009: 150; cf. Johansson 2008). For LO a statecoordinated migration policy and strict entry control in different ways correlates with the main objectives and functions of trade unions: to control and restrict the supply of labour on the labour market and to defend the members' interests regarding wages, working conditions and welfare state rights. In different ways, LO looks upon migrant workers as a complement to the domestic workforce, and assigns them a supporting role which should be activated only when the domestic supply is shown to be insufficient (LO 2000, 2004, 2006). First, as migrants would lack the ability to conduct their job search on-site, a situation could not emerge where migrants would be tempted to accept wages and working conditions below collective agreement standards if their job-search visas neared expiration and no employment offers had been received (LO 2006: 12­21). Second, preventing the entry of migrants until an employment contract is received and a permit is granted satisfies a second concern that LO has: that non-EU labour migrants with no employment contract in hand would overstay their job-search visa and join the informal economy rather than leave Sweden. Thus, a central feature of LO's critique against the unregulated non-Nordic migration of the 1960s, in which foreign workers arrived in Sweden on tourist visas to conduct their job search, is that it generated a poor match of labour supply and demand, resulting in significant numbers of unemployed, homeless migrants living in camp-like conditions. LO understood then that the solution was to advocate `a more regulated migration' when confronted with the negative effects of `tourist migration', and the union confederation is convinced that a comparable system of labour migration would introduce a disruptive force on to the Swedish labour market again (Andersson & Pettersson 2003: 32, author's translation). Third, requiring that non-EU migrants be supplied with open-ended employment contracts increases job security and imposes higher costs on employers seeking to dismiss migrant workers than in situations where temporary contracts are used. Finally, maintaining the strong position of unions in the decision-making process of work permits function as a guarantee, from LO's point of view, that no admission of migrant workers will take place without taking the interests of unions into account (LO 2006: 16­21). In the eyes of LO, there is less risk involved in granting labour migrants permanent residency and full labour market access when regulation and control measures have been put into place in the initial phases of the migration process to ensure that migrants are unlikely to have a negative impact on existing domestic labour reserves. LO prefers a state-coordinated model, both in terms of the involvement of multiple actors in the decision-making process regarding work permits, and regarding migration policy measures guaranteeing that labour migration do not threaten social democratic policies intended to mobilise domestic labour reserves or allow employers to undermine conditions associated with collective bargaining agreements. These policies and institutional practices have been central features of the Swedish model. Accordingly, LO views market-liberal labour migration as disruptive to the workings of the Swedish CME. Conclusion This article has explored the extent to which the VoC approach can inform our understanding of the role of organised interests in the process of labour migration policy reform in Sweden during the 2000s. While the VoC literature emphasises that firms, the state and its strategic allies will support reform measures thought to increase firm capacity, this case study has shown that LO has opposed SN's calls for a market-liberal labour migration policy which has been presented as serving the interest of employer preferences to secure a suitable skilled workforce. Rather, LO's preferences for a statecoordinated labour migration policy are grounded in a desire to ensure that the immigration of migrant workers, and the conditions under which migrant workers have access to Swedish society, will not be at odds with other instruments of economic policymaking in line with broad social democratic goals, in particular, an active labour market policy intended to mobilise domestic labour reserves. LO reports have expressed concern over the degree to which marketliberal labour migration policy may threaten central features of the Swedish model. The legacy and the image of the Swedish model, and not least the strong position of organised labour within this model, remains very important when LO evaluates and formulates economic and social policy reform proposals. The influential VoC volume by Hall and Soskice (2001) underscores that policies stand the greatest chance of achieving desired objectives when they are `incentive compatible'. LO may value maintaining incentive compatibility, but it does not appear to be guided by functionalist reasons to reinforce firm capacity or to secure better economic efficiency. Rather LO seems to prefer an incentive compatible labour migration policy in line with the workings of the Swedish CME, because it is best thought to preserve those economic and social policies that have guaranteed a strong position of organised labour and strengthened the living conditions of the working class within a capitalist economy (cf. Bucken-Knapp 2009; Johansson 2008). In contrast to the portrayal of employers in the VoC literature, and in previous studies by Menz (2008, 2010) of employer preferences in relation to migration policy, Swedish employers within SN have not sought to preserve a labour migration policy that is incentive compatible with institutional and policy features of the broader political economy. Furthermore, research into the decline of Swedish corporatism in the 1990s and 2000s has shown how employers, for strategic and ideological reasons, no longer identify their interest as being best served by corporatist political institutions (Lindvall & Sebring 2006; Lindvert 2006; Rothstein & Bergström 1999). It is not a primary aim of this article to assess whether the overall era of Swedish corporatism is ended or not. However, when it comes to labour migration policy one conclusion stands out in this regard. The defence of the broad Swedish model has been central for LO, but SN has not supported a continued administrative corporatism (cf. Bucken-Knapp 2009). The employers' struggle to strip unions and labour market boards of their influence in the decision-making process regarding work permits, as well as the decision by the bourgeois government to assign employers a decisive role over the entry of migrant workers, marks an important shift in this field of policymaking. In Swedish labour migration policy, corporatism now seems to have minimal significance and employers have actively sought its completion. These results regarding SN's market-liberal policy preferences on labour migration and the organisation's retreat from corporatism in this field of policymaking corresponds to SN's increasingly market-liberal policy agenda in the last two decades. Previous research studies have also demonstrated how SN's liberalistic policy orientation and retreat from corporatist modes of political interaction have been significant in other policy areas such as labour market policy, labour regimes and collective bargaining (Berge et al. 2009; Lindvall & Sebring 2006; Lindvert 2006). To sum up, this case study of the role of organised interests in Swedish labour migration policymaking underscores how economic and social policy reform reflects contradictory political interests between capital and labour, rather than the desire to maintain institutional stability as emphasised in influential VoC literature. However, despite these shortcomings, the VoC approach illuminates that labour migration policy is definitely embedded in a broader context of economic policies and institutional arrangements (cf. Bucken-Knapp 2009; Caviedes 2010a, 2010b; Menz 2008, 2010). The implications of a reformed labour migration policy can therefore modify the workings of labour markets, the power balance between capital and labour and the composition of the national political economy. Jesper Johansson is senior lecturer in social work at Linnaeus University in Växjö. His main research interests revolve around migration, working life, political economy and social policy. Recent key publications are `Så gör vi inte här i Sverige. Vi brukar göra så här': Retorik och praktik i LO:s invandrarpolitik 1945­1981 (`We actually don't do like that here in Sweden. We usually do like this': Rhetoric and Practices in LO's immigration policy 1945­1981, diss., Växjö University Press, 2008) and `Globala och lokala perspektiv på kvinnliga erfarenheter av migration: En diskussion om betydelsen av genusperspektiv och migrationssystemteori' (`Global and local perspectives on female experiences of migration. A discussion of the significance of gender perspectives and migration system theory') in Samhällshistoria i fokus: En festskrift till Lars Olsson om arbete, migration och kultur (History of society in focus: A festschrift to Lars Olsson about work, migration and culture, eds. Lars Berggren, Mats Greiff, Jesper Johansson, Johan Svanberg & Malin Thor, Big Bad Books, 2010). Acknowledgments I would like to acknowledge supportive comments from the participants in a research seminar at Malmö Institute for Studies of Migration, Diversity and Welfare (MIM), Malmö University, where I presented a draft of this article. Two anonymous reviewers are also acknowledged for their helpful comments.

Journal

Nordic Journal of Migration Researchde Gruyter

Published: Nov 1, 2012

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