Should workers in Norway expect another real wage decrease this year?
One of Norway's leading unions has said that it will push to prevent a real wage decrease in collective bargaining negotiations. But how likely is this to happen, and will workers be better off this year than last year?
Government figures released earlier this week show that wages rose by around 4.1 percent last year. However, inflation in Norway outgrew wages, with the consumer price index in Norway rising by 5.8 percent between the end of 2021 and the end of 2022.
Overall, this means that workers in Norway saw their wages fall in real terms last year. The government's figures say that real wages, after taxes were accounted for, decreased by one percent last year.
This year, the government expects inflation to be around 4.8 percent. There is uncertainty surrounding this forecast due to fluctuating prices, the war in Ukraine and how the krone performs. The estimate will be updated in mid-March.
The Norwegian Confederation of Trade Unions (LO), one of the largest union groups in the country, has said that it will push for a real wage increase and more purchasing power for its members in collective bargaining talks, business news publication E24 reports.
Using the government's forecasts would equate to a wage rise of almost five percent or more. LO will meet with the employer organisation, the Confederation of Norwegian Enterprise (NHO), in a month for provisional talks over collective bargaining agreements.
It will also push for public sector workers and other employees who have seen lower wage development in recent years to see the biggest increases.
"They have been lagging behind others for the past three years. Therefore, I think they should get more than the front subject this year," head of LO Peggy Hessen Følsvik told public broadcaster NRK.
Still, the NHO has warned that using inflation as the basis for wage negotiations could be considered short-sighted as several companies under its umbrella expect weaker results, lower investment compared to the previous year, and increased job cuts.
READ MORE: What is a Norwegian collective bargaining agreement?
"The future prospects are perceived as bad for many. The frontline model assumes that it is the companies' ability to pay that should be the basis for the wage settlement - not the price increase," Nina Melsom, director for working life and tariff agreements in the NHO, told NRK.
Meanwhile, Norsk Industri, the largest group within the NHO, has told the Norwegian newspaper VG that the absolute limit it will be able to offer workers in 2023 would be a salary increase of up to 4.5 percent. Should the government forecasts be accurate, this would equate to a real wage decrease increase in 2023.
Therefore, for a real wage rise to be achieved, it would require tough negotiations. Should negotiations fail to lead to an agreement, the unions can call strikes and industrial action to try and secure more favourable terms.
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Government figures released earlier this week show that wages rose by around 4.1 percent last year. However, inflation in Norway outgrew wages, with the consumer price index in Norway rising by 5.8 percent between the end of 2021 and the end of 2022.
Overall, this means that workers in Norway saw their wages fall in real terms last year. The government's figures say that real wages, after taxes were accounted for, decreased by one percent last year.
This year, the government expects inflation to be around 4.8 percent. There is uncertainty surrounding this forecast due to fluctuating prices, the war in Ukraine and how the krone performs. The estimate will be updated in mid-March.
The Norwegian Confederation of Trade Unions (LO), one of the largest union groups in the country, has said that it will push for a real wage increase and more purchasing power for its members in collective bargaining talks, business news publication E24 reports.
Using the government's forecasts would equate to a wage rise of almost five percent or more. LO will meet with the employer organisation, the Confederation of Norwegian Enterprise (NHO), in a month for provisional talks over collective bargaining agreements.
It will also push for public sector workers and other employees who have seen lower wage development in recent years to see the biggest increases.
"They have been lagging behind others for the past three years. Therefore, I think they should get more than the front subject this year," head of LO Peggy Hessen Følsvik told public broadcaster NRK.
Still, the NHO has warned that using inflation as the basis for wage negotiations could be considered short-sighted as several companies under its umbrella expect weaker results, lower investment compared to the previous year, and increased job cuts.
READ MORE: What is a Norwegian collective bargaining agreement?
"The future prospects are perceived as bad for many. The frontline model assumes that it is the companies' ability to pay that should be the basis for the wage settlement - not the price increase," Nina Melsom, director for working life and tariff agreements in the NHO, told NRK.
Meanwhile, Norsk Industri, the largest group within the NHO, has told the Norwegian newspaper VG that the absolute limit it will be able to offer workers in 2023 would be a salary increase of up to 4.5 percent. Should the government forecasts be accurate, this would equate to a real wage decrease increase in 2023.
Therefore, for a real wage rise to be achieved, it would require tough negotiations. Should negotiations fail to lead to an agreement, the unions can call strikes and industrial action to try and secure more favourable terms.
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