Unions brace for lower pay growth

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Norway’s most powerful unions were gathering Tuesday to agree on their demands for collective bargaining this spring, amidst reports that wage growth in the country has fallen to its lowest level in more than 10 years. Gerd Kristiansen and the unions under the LO federation she leads look likely to accept much lower pay raises, if any at all, but will seek higher wages for their lowest-paid members and better pensions in return.

Labour leader Gerd Kristiansen of LO (left) and Kristin Skogen Lund of national employers' organization NHO have shown more signs of cooperation than conflict in recent months, as Norway's economy downturn has continued. Now they're bracing for annual wage negotiations, though, and pension issues can be difficult. PHOTO: NHO

Labour leader Gerd Kristiansen of LO (left) and Kristin Skogen Lund of national employers’ organization NHO have shown more signs of cooperation than conflict in recent months, as Norway’s economy downturn has continued. Now they’re bracing for annual wage negotiations, though, and pension issues can be difficult. PHOTO: NHO

Kristiansen has already acknowledged tougher times for many of the employers making up her traditional opponent, national employers’ organization NHO. Norway is on the verge of major economic restructuring, brought on by the steep fall in oil prices and the need to lessen reliance on the oil and offshore industry. Economic growth is likely to slow, along with wage growth, after a decade of boom years.

That’s reflected in the opening statements to LO’s agenda for Tuesday’s meeting: “Norwegian labour and business can experience the deepest changes since World War II over the next 10 years,” it reads. The economic restructuring, lower oil prices and higher unemployment have prompted the chief of Norway’s central bank, among others, to warn of meager wage growth in the years ahead.

‘Problems continuing to spread’
“The decline hasn’t yet hit the entire country, but problems are continuing to spread,” declared LO, the country’s largest trade union confederation. “This comes on top of a clearly weakend inclusion of vulnerable groups in the labour market.” While some sectors are doing well, such as hotels, restaurants and seafood, others are hurting and the unions recognize that.

New figures presented Monday by a state commission (Teknisk beregningsutvalg, TBU) showed that average wage growth in Norway fell from 3.1 percent to 2.18 percent last year, while prices rose 2.1 percent. That led to the lowest level of actual purchasing power in more than a decade. Real pay growth rose by just 0.6 percent. Prices this year are expected to rise by around 2.5 percent, and while LO has put a higher priority on job preservation than on pay growth, it doesn’t want purchasing power to decline any further.

The unions, though, seem inclined to accept modest pay offers in return for narrower pay gaps, which could be achieved by boosting the wages of low-income groups at the expense of higher-paid workers. Several of the union groups within LO also demand better pensions and some have criticized Kristiansen for reportedly hammering out a new pension proposal with her counterpart at NHO, Kristin Skogen Lund. The LO and NHO leaders have also teamed up on several occasions in recent months, as Norway’s economic downturn took hold, in a joint effort to preserve jobs.

‘Solidarity’ and ‘sustainablity’
“It’s sort of a solidarity alternative, but we found out that the challenges involve so much that we’re calling it a ‘sustainability alternative,'” Lund told newspaper Dagens Næringsliv (DN) last month. The “solidarity alternative” was a repeat of joint LO-NHO efforts made in the early 1990s, when Norway also sunk into an economic downturn. At that time, moderate wage pacts were also a pillar of negotiations, as they are now as well.

“We have never been part of trying to negotiate our members out of their jobs, and we don’t to that this year either,” Kristiansen told newspaper Dagsavisen. She prefers to describe lower wage demands as “collective common sense” as opposed to simply “moderation.”

The pension issue is thorny, though, and LO listed several priorities on Tuesday. They included pension earnings from the first day on a job, making pension plans part of the tariff agreement, making it easier to change jobs without losing pension benefits, a new system for better accumulation of benefits from various pension programs and a re-evaluation of the ability to retire early and start claiming pension benefits before reaching Norway’s official retirement age og 67.

Norway’s annual spring labour negotiations begin March 7, with LO’s Felleforbundet leading the way in talks with industrial employers. Talks between LO’s other unions and employers’ groups extend through May.

newsinenglish.no/Nina Berglund