Unions, insurance and changing welfare states: The emergence of obligatory complementary income insurance in Sweden

Abstract

Why do unions that support comprehensive public unemployment insurance introduce the private alternative known as obligatory complementary income insurance (OCII)? In this article, we seek answers to how Swedish unions have thought and argued on OCII, how these thoughts and arguments change over time and whether there are differences across unions within the same confederation and across different confederations. The material includes congressional minutes and other internal documents as well as newspapers and union magazines, 2000–2020. We find a myriad of arguments for and against OCII. Many unions highlight the eroded public unemployment insurance as the prime trigger of OCII. Yet, for unions with high rates of unemployment, the OCII premium may be too expensive to handle. Further, some unions argue that high-wage members are subsidised by low-wage members: OCII only benefit those who earn above the ceiling in the public unemployment insurance. We also find that OCII enhances sharp competition between unions in order to keep and recruit new members. Higher ceiling in public unemployment insurance makes OCII useless for many union members, and thus less valuable as a tool for recruitment. To avoid member flight, therefore, there is an incentive for unions to downplay the need to restore public unemployment insurance compatible with a universal welfare model.