Employee funds

Employee funds (Swedish: Löntagarfonder), sometimes referred to as Wage Earner funds, is a socialist version of sovereign wealth funds whereby the Swedish government taxed a proportion of company profits and put into special funds charged to buy shares in listed Swedish companies, with the goal of gradually transferring ownership in medium to large companies from private to collective employee ownership. The funds were controlled by representatives of Swedish trade unions.

The idea was launched in the 1970s by the Swedish Social Democratic Party, and they were in place from 1982 to 1991.

During the 2020 United States presidential election, the candidate Bernie Sanders proposed for employee funds to be adopted in the United States.

Meidner Plan

The plan to establish employee funds was introduced as the Wage Earners Funds Proposal, also known as the Meidner plan. It was first proposed in 1975 by the Swedish Trade Union Confederation (or the LO); a revised final draft was published in 1976. The Meidner plan gets its name from the LO economist Rudolf Meidner, who played a leading role in developing the idea and was the principal drafter of the plan.

In 1971, the Swedish Trade Union Confederation commissioned a research committee to address union concerns about wages and the state of the economy. Despite the solidarity wage policy in place at the time (known as the Rehn–Meidner model), the gap in income between capital and labour was growing; the country was also experiencing a wave of labour unrest over pay. In particular, the Federation of Metal Workers stressed that the problems of investment planning and capital formation needed to be resolved without increasing the concentration of power and wealth in the hands of a minority. The research committee was headed by Meidner and produced its first report in 1975.

Implementation and reversal

Throughout their existence, they caused much political controversy. Proponents described them as an attempt to increase the power of labour over Swedish companies, and opponents described them as large step towards socialism.

They were introduced following the Social Democrat victory at the 1982 Swedish general election, and accumulated funds until they were abolished after a conservative victory in the 1991 general election. The accumulated wealth was transferred to two holding vehicles named Atle and Bure. Both vehicles were subsequently listed on the Stockholm Stock Exchange. On October 4, 1983, an anti-employee funds demonstration in Stockholm gathered between 80,000 and 100,000 participants. It was the largest political protest - in terms of numbers mobilised - to take place in Sweden, from the liberal and right wing political block.

Subsequent Social Democrat victories, such as the one in 1994, did not lead to their reintroduction, as leading members of the party found the whole debate surrounding the funds a problem for the party. Famously, Minister of Finance Kjell-Olof Feldt was captured on camera while he was writing a negative poem about the funds in his bench in Parliament after they had been introduced.