The Nordic countries are known for being small open economies with large public sectors due to universal welfare states and high living standards across occupations and education levels. This combination has recently been characterized as a balanced growth model in which both exports and internal demand (private and public) contributes to economic growth. In contrast to export-led growth models – as seen in Germany – which have starved wages and thus internal demand to increase the cost competitiveness of the export sector (Baccaro & Pontusson 2016), the Nordic countries seem to be able to do both (Alsos et al. 2019). In 2013, The Economist proclaimed Nordic countries as the world’s next ‘supermodel’ due to the emphasis on market dynamics and income security rather than job tenure – a useful blueprint for labor market policy configured for the rapid technological changes foreshadowed in the twenty-first century (Wooldridge 2013).
In more recent years, the OECD has linked the flexibility, high economic performance, and high living standards with independent collective bargaining conducted by strong social partners (OECD 2018, 2019). In all the Nordic countries, the industrial or employment relations systems are based on collective pattern bargaining involving strong trade unions and multi-employer organizations with a minimum of state intervention (Andersen et al. 2015). This system of collective bargaining is underpinned by strong local cooperation between employers and employees (Rasmussen & Høgedahl 2021).
Hence, it is evident that the performance and success of the Nordic labor market models rely on strong collective representation through trade unions and employer organizations (Høgedahl 2020). However, although employer density levels seem stable, Nordic trade unions have all to some degree seen a membership decline since the mid- 1990s. This trend begs the question: Do trade unions within the Nordic labor market models showing signs of erosion? If so – why is the union density dropping and what are the implications for the Nordic labor market models?
