A Welfare State Without Labor Movements?

Work Demonstration in Aarhus in 1899 on the labor movement international celebration , d . May 1st. Drawing by Tom Petersen

(source: https://danmark.systime.dk/index.php?id=519&MP=161-436)

Written by Anders Riel Muller, Solidarity Correspondent

Economic democracy and the welfare state have been debated widely in South Korea, especially during the 2012 presidential election where both conservatives and the liberal-left campaigned on a platform of economic democratization and a welfare state. The Scandinavian welfare model has often been used as the goal model. This focus on Scandinavia as a model for a South Korean welfare state raises some questions. First, from within Scandinavia, it is difficult to talk about ONE model. Countries such as Sweden, Norway and Denmark differ in the organization and historical trajectories of their welfare services. In this article, I will focus on Denmark as it is the country and system I know best. While not a comprehensive account of the Scandinavian welfare model, the argument presented should still be relevant to discussions on Scandinavian welfare models in general.

Denmark has not only received international attention for its welfare system, but also by its consistent ranking as one of the top three happiest countries in the world. A big reason for this has been its welfare state, unemployment benefits, and comparatively high wages and low income inequality. In the past few years, I have met Korean students, immigrants, activists and academics who visited Denmark and experienced and witnessed firsthand living in a country with a 37 hour work week, six weeks of paid vacation per year, free education and virtually unlimited cheap health care. Nonetheless, there are some central misconceptions of how this welfare system was achieved and how it is maintained. When South Koreans analyze the Scandinavian welfare state, they ignore one important element: the labor movements.

Many Korean observers I have talked to and whose articles I have read, focus on the state as the guarantor of welfare services, but such view is limited at best. Labor movements and mobilization are central to the establishment and maintenance of the Danish welfare system. When people equate the Danish welfare system with the welfare state, it incorrectly directs attention to the state rather than the social forces which preserve and further strengthen the welfare system. First and foremost, the welfare system must be understood as a capitalist compromise between the state, employers and labor. This system would have been impossible without a strong and organized labor movements for two reasons: 1) in the labor market, the balance of power between labor and employer is central to the relatively equal income distribution and workplace benefits that people in Denmark enjoy despite the rising income inequality in the past decades; 2) the labor movement entered parliamentary politics through the Social Democratic Party and the Communist Party in the early twentieth century enabling labor movements to advocate for labor rights and economic redistribution not only at the workplace but also in national politics.

The Danish labor movement emerged out of the deplorable working conditions during Denmark’s rapid industrialization in the late 19th century. This was a period of immense social and economic transformation throughout Europe. Denmark was the site of violent and deadly struggles between labor and capital. A key turning point took place in 1872, when the government deployed military cavalry and police to suppress a protest by the Danish Branch of the Socialist International Workers. Key Socialist leaders were arrested and imprisoned, and the government banned the International Socialist Workers movement. This led parts of the labor movement to reorganize and advocate for workers rights through the parliamentary system rather than just through strikes and organizing: In 1876, the Social Democratic Party was founded as the labor movements’ political voice. Despite this early suppression of workers’ movement, labor unionization spread to almost all economic sectors during the late 19th and early 20th century. Key to the Danish labor market system was the 1899 compromise between employers – who agreed to recognize and accept labor unions’ representation of workers - and workers – who accepted employers’ rights to manage. This industry-wide collective bargaining remains a central part of the Danish welfare system. Yet, the compromise was reached not because of a benevolent state, but through the organized political struggles of labor movements. Up to eighty percent of Danish workers are still covered by collective bargaining agreements between labor unions and employers’ association. It is particularly important to point out the mobilization and organization of unskilled workers represented through SID (Special Workers Union) and KAD (Womens’ Workers Union). These two unions merged in 2005 to become 3F; today, they are Denmark’s largest union with almost 300.000 members and have been instrumental in the struggle for rights and benefits for the most vulnerable segments of the Danish labor market. 3F remains a powerful union that has more collective bargaining agreements with employers than any other union and even though Danish unions have experienced significant decline in the past decade, sixty percent of its labor force remains unionized and sectoral collective bargaining agreements remain the norm.

The second central aspect of the labor movements in the Danish welfare system is the former’s establishment of political parties to represent the interests of labor. The first major political victory for the Danish labor movement was the 1924 elections in which Social Democrats became the biggest party in Denmark forming the first labor led government in Danish history. Whereas many today see the Social Democratic party as the source of the Danish welfare system, the Social Democrats have always depended on a well organized labor movement for votes and to train its political leadership. Following World War 2 the proliferation of Keynesian welfare economics in Europe and strong popular support allowed the Social Democratic Party to build what is now known as the welfare state. The 1950s and 1960s was a period of enormous expansion of welfare services such as education, health care, senior care under the auspices of Social Democratic governments, which remained in power from 1953 to 1973 briefly interrupted by a center-right government (1968 to 1971). What allowed the Social Democrats to stay in power was the loyal support of organized labor and their Parliamentary members’ political training through their earlier work in labor unions. In recent decades, the distance between the labor movements and the Social Democratic Party has increased due to working class voter migration to other parties and the professionalization of the party where increasing parliamentary members come from academic backgrounds rather than the labor movements. Nevertheless, the newly elected chairperson of the Social Democrats, Mette Frederiksen, recently reiterated the need to reinvigorate and reinforce the close ties between labor movements and the party.

What are some key lessons that Korea can draw from the case of labor mobilization in the Danish welfare system? It is my opinion that any debate about the Scandinavian system and its applicability in South Korea misses the point without a discussion about the role of labor. The active suppression of labor movements and workers’ rights in South Korea undermines the establishment of a Scandinavian inspired welfare system. Without more balanced relations of power between labor, employers and the state, it is difficult to envision a system that protects the interests of workers. This includes the right to collective bargaining and unionization across all sectors of the economy perhaps most urgently in the huge sectors of temporary work and subcontracting generating a huge underclass and massive income disparities. It also means aggressively expanding labor unionization from permanent workers to these underprivileged workers. Secondly, South Korean labor lacks strong political representation in the National Assembly, which further erodes the possibility of creating a Scandinavian style welfare system. In short if South Koreans desire a welfare state, they must challenge the existing power balance and overcome the institutionalized and legal repression of organized labor. The Danish welfare system was first and foremost achieved through the Danish workers’ political mobilization and political struggles. For South Koreans to achieve such welfare system will require a strong labor movement and a party responsive to the latter’s aspirations.