4. The company and workers
4.2 Propositions and decisions
As made clear above, the idea of nationalizing tobacco production was discussed back and forth from 1902 onwards. The tobacco workers were highly affected by the outcome of the political process, which they also tried to influence by calling upon decision-makers. Basically, the tobacco workers were concerned about the prospects of becoming unemployed, and about having only one employer, particularly if the company was run by private interests.
Previously, tobacco workers could always look for jobs in other factories if mistreated or dismissed. With the creation of a monopoly this exit possibility would disappear. It was feared that a monopoly with private interests involved would cut wages and treat the workers arbitrarily. Against this background, the union demanded guarantees from the state of fair treatment of workers by the future employer. Instead of a company jointly owned by the state and private
actors, which was what the government had proposed, the union wanted a company directly managed by the state.1
Neither the investigators behind the report on tobacco taxation published in 1911 nor the government thought that nationalization would lead to great unemployment among tobacco workers.2 This optimistic view was not shared by the Tobacco Workers’ Union. The union relied on an estimate in the government proposition stating that increased taxation would cause the consumption of cigars, cigar-cigarettes and cigarettes to decrease by 20 percent, and the consumption of other tobacco products to decrease by 10 percent. This would place the jobs of about 1,000 tobacco workers at risk. The union argued that tobacco workers were particularly vulnerable to unemployment due to “[…] the stamp the occupation is already setting on the worker in young ages […]”, and to the fact that many of the workers, particularly the male ones, had physical disabilities.3 This frailness was not only caused by the work, but also adverse selection as the conditions in the tobacco industry allowed the employment of people who could not get jobs in other parts of the labour market.4
After a general meeting in July 1914, the union decided to put a list of demands to the government.5 In addition to the previously mentioned demand for direct state management, the list included demands concerning unemployed tobacco workers’ rights to compensation.
The demands of the union were also put forward by Social Democrats in Parliament, among others the well-known economist and sociologist Gustaf Steffen, who remarked that the government proposition did not say much about
1 Lindbom & Kuhm 1940, pp 210-212.
2 The investigators rejected the idea that the company would make considerable workforce reductions in the foreseeable future. On the contrary, they argued that domestic production and labour demand would increase since the monopoly would attempt to restrict import. Thus, even if the monopoly mechanized production in the future, a considerable amount of manpower would still be required.
Betänkande och förslag angående reglering af tobaksbeskattningen afgifna den 2 september 1911 af särskildt utsedda kommitterade: Del 1, Stockholm 1911, pp 75-76. When explaining the proposition in front of the other members of cabinet, the Minster of Finance said that the monopoly was expected to employ all who had been previously employed in the industry. Bihang till riksdagens protokoll 1914, Proposition nr 254, p 100.
3 Swedish: ”[…] den prägel yrket sätter på arbetaren redan i unga år […]”. Lindbom & Kuhm 1940, pp 216-217.
4 See Fogelström 1965, p 204. Referring to the United States, Cooper (1987, p 64) also writes about
“[…] physically handicapped men who were attracted to the trade because of its sedentary nature.”
5 Lindbom & Kuhm 1940, pp 218-219.
the relationship between the future monopoly and its workers.6 Like the Tobacco Workers’ Union, the introducers of the bills preferred the monopoly to be directly managed by the state. Moreover, they underlined that it was in the state’s own interest to bring about a good relationship between the tobacco workers and the future company. They argued that the tobacco workers should have the same rights – when it came to wages, pensions, vacation, sick benefits, participation, apprenticeships and employment protection – as other state employees. Employment protection was especially emphasized. When arguing that tobacco work required “[…] a quite particular skill, which is hard to replace”,7 the reasoning of Steffen and his comrades was thus very similar to Becker’s human capital theory.
Worth noting is that some of these demands had not been put forward by the union, but had been added by the introducers of the bills themselves, perhaps without reflection. To demand treatment equal to that of other civil servants was not unproblematic since that in some respects could mean worse conditions. At the time, the civil servants had not yet acquired the right to negotiate collectively and wages were unilaterally decided by Parliament.8
Anyhow, the bills were given a positive reception in the committee work.
Although the committee did not award the tobacco workers equal status to civil servants, it recognized more generous and inclusive compensation rights in comparison with the government proposal. Furthermore, the committee made the following statement, emphasizing the importance of employment protection for the tobacco workers in the future:
In addition to what is contained in the bill, the committee would like to point out the desirability that the workers in a company, which as a planned monopoly would have exclusive control of a particular trade over the whole country, are made secure to the greatest possible extent against the risk, through future concentration of production or of layoffs, of being denied the possibility of continuing their livelihood through professional work. A certain guarantee that the workers’ interests in the event of the introduction of a state monopoly […] will not be overlooked seems to be provided by the fact that half of the members of the monopoly board will be appointed by the [government]. In the committee’s
6 Bihang till riksdagens protokoll 1914, Motioner i första kammaren nr 106; Bihang till riksdagens protokoll 1914, Motioner i andra kammaren nr 263.
7 Swedish: ”[…] en alldeles speciell yrkeskunnighet, som är svårersättlig.” Bihang till riksdagens protokoll 1914, Motioner i första kammaren nr 106, p 5.
8 Lundh 2002, pp 97-98.
opinion consideration should be given to whether any additional measures for the workers’ security can be taken.9
In this respect the committee mentioned an “[…] arrangement, which exists in the private railroad companies”.10 What the committee had in mind was most likely pension schemes. However, it did not make any special request in this matter but presupposed that the government would undertake “[…] the measures […], which the workers’ legitimate interests may require”.11
With some exceptions, the position taken by the committee became the decision of Parliament. Although the workers did not persuade the political majority to let the monopoly be directly managed by the state, some acknowledgements concerning the workers’ rights in the future company were made. An important feature of the decision was that redundant tobacco workers were awarded the right of compensation if laid off before 1 June 1920. The compensation issue is further discussed in chapter 10. The following section concentrates on the guidelines that the state set up for the Tobacco Monopoly in general and for its relation with the workers in particular.