EXPLAINED: Why Norway isn’t in a rush to implement a minimum wage
Norway's government and trade unions have welcomed an assessment from the European Commission that an EU directive on minimum wages wouldn't be relevant for the country. Here's why Norway is unlikely to introduce a minimum wage.
Earlier this year, the EU adopted a new set of legislation which means a minimum wage will be required in 21 of its 27 member states.
Norway is not a member of the EU but is a part of the European Economic Area (EEA). The European Commission, responsible for implementing the EU’s policies, investigated whether a minimum wage would be relevant for Norway through its EEA membership.
Ultimately, the European Commission found that Norway would not need to adopt EU wage rules as an EEA member. Despite being known for high salaries, Norway doesn’t have a minimum wage.
Despite the country not having a general minimum wage, the European Commission’s findings were welcomed by both the government and trade unions.
“I am very satisfied that the European Commission considers the directive (to implement a minimum wage) not EEA-relevant. It is in accordance with the ministry’s assessment,” Minister for Employment and Inclusion Marte Mjøs Persen stated in a government announcement.
Peggy Hessen Følsvik, head of the Norwegian Confederation of Trade Unions (LO), added that a minimum wage wouldn’t be necessary for Norway.
“There is not the same need for a national minimum wage in Norway (compared to other countries). It is then gratifying that the European Commission has confirmed that Norway is not obliged to include the minimum wage directive in the EEA agreement. This does not make it Norwegian law,” she told trade union and working life news outlet FriFagbevegelse.
So why is Norway seemingly against a minimum wage?
Norway doesn’t have a general minimum wage that applies nationwide and across all industries. Instead, wages are regulated by labour market forces, specifically collective bargaining agreements between trade unions and employer organisations.
These agreements govern wages and working conditions in the sectors within which the employer organisations and unions operate.
A lot of times, these wages will apply to union members. Almost two million workers in Norway are union members due to the collective bargaining system.
However, a minimum wage has been implemented in a number of sectors, particularly those with many international and temporary workers.
The aim is to prevent exploitation in industries where it may be difficult for workers to unionise. The Norwegian Labour Inspection Authority (Arbeidstilsynet) lists sectors with a minimum wage on its website.
Similar systems for regulating wages are also seen in Sweden and Denmark. Despite both countries being EU members, they are exempt from the directive on minimum wages.