Have low-paid jobs increased in the Swedish labor market? Defining low pay in the context of the Nordic model

Abstract

Can the Nordic wage-setting model, where social partners decide wages through collective agreements, counteract a growing low-paid sector? This article tests four definitions of low-paid jobs to analyze whether this sector has grown for the period 2005–2020 in Sweden. Despite policy changes pointing towards growth, all definitions show a slight decrease in low-paid jobs over time. The authors argue that the industrial relations system, with the aim of keeping the industry wage increases in check to aid export competitiveness, also sets a uniform level wage that limits low-paid jobs. It is also found that low pay in the Swedish setting is partly a result of working less than full-time or having unstable employment, and service workers and those with low education are becoming increasingly common in this position.