Saco arose out of the student organisation SYACO, a confederation for Sweden’s young professionals, in 1947, as a result of students becoming involved in the issue of how their studies should be financed.
SYACO, which was founded in 1943, drove the issue of graduates' repayment problems so successfully that study loans were introduced in 1946, with the state as guarantor. This success reinforced the idea of forming an association for graduates, for both students and professionals. Therefore, Saco was formed in 1947, with 18 unions and 16,000 members.
The first unions in Sweden were founded among blue collar workers in the 1870s. It took until 1928 for blue collar workers in private employment to be given the right to organise and negotiate through collective agreements. Ten years later, white collar workers in private employment received the same rights. Public employees first received collective agreements and the right to strike in 1966, while employers got the right to announce lockouts, i.e. to lock employees out of the workplace.
What is usually called the Swedish model was developed during the 1930s. On the whole, it means that salaries and working conditions are managed through negotiation between unions and employees, and are regulated in a collective agreement. The model is based upon mutual understanding of the rules of the game on the labour market, and almost the entire Swedish labour market is now regulated through collective agreements.
In 1952, Saco undertook its first major dispute in association with a revision of state organisation. This dealt with the employer's right to revoke salary benefits for members in organisations that had announced or undertaken industrial action. This was not accepted by the Saco unions and, finally, the parties agreed to exclude such a clause from the agreement.