Norwegian workers’ wages increased

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Representatives of Norway’s employers and workers have reached an agreement in their annual wage negotiations – with 200,000 private sector workers in industry, construction and some service industries guaranteed a national wage increase of NOK 2 (USD 0.36) per hour.

LO boss Roar Flåthen has secured the first of many pay deals for his members, but the tone set means that millions of Norwegian workers will get a real wages increase. PHOTO: Trond Isaksen/LO

The Norwegian Federation of Trade Unions (Landsorganisasjonen, LO) and the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisasjon, NHO) have been negotiating since March 21, and had a deadline of April 1. The national level negotiations will now set the tone for further negotiations in different sectors and at the local level, and also touched on low-paid workers, equality and skills training.

Wages, severance packages, equality and education
The agreement sets a framework of a 3.65 percent increase in wages for 200,000 of LO’s members, including local increases and so-called “wage drift” that occurs during the year. This will also mean that LOs’ 650,000 other workers will also be in for a real wage increase, after statistics showed a price increase of at least 2 percent nationally. Lower-paid workers, who make up around 27 percent of LO’s membership, will receive at least an additional NOK 1 per hour on top of the overall improvement.

Beyond wages, the severance pay entitlement for those aged 55 to 61 has been increased, meaning that a 61 year old worker will now receive a tax-free NOK 80,000 (nearly USD 15,000) pay off. The organisations agreed a seven-point plan to improve equality in the workplace, including the creation of a common application to the government on proposed changes to the structure of maternity and paternity allowances. They will also request that the government enter into cooperation with both organisations in order to improve lifelong learning opportunities, reduce dropouts at the upper secondary school level and ensure that adults that lack qualifications from the upper secondary school level can develop their basic skills.

Unions ‘satisfied’
Trade unions leaders were happy with the result. Roar Flåthen, leader of LO, said that he was “satisfied that the mellomoppgjøret managed a negotiatied solution,” and suggested to newspaper Aftenposten that “the result shows consideration to companies’ competitiveness and the conditions of the Norwegian economy.” A statement from LO argued that the settlement would be particularly beneficial for female workers in these particular sectors, of whom 50 percent are considered as lower-paid and will therefore receive a much bigger boost. The union had previously stated that low-paid woman would be their priority during the negotiations.

Tore Eugen Kvalheim, the leader of the the Confederation of Vocational Unions (Yrkesorganisasjonenes Sentralforbund, YS) – a rival union association to LO representing 20,000 workers in the sectors relevant to these negotiations – was also happy, writing in a press statement that “the result gives members increased purchasing power” and “secures low-paid and equal wages aims that have been among our most important demands.” YS also described the result as a “responsible” one that would “not put workplaces in danger.”

NHO's John G Bernander is concerned for companies struggling against European and worldwide competitiors. PHOTO: Hans Fredrik Asbjørnsen/NHO

Employers ‘hesistant’
In contrast, NHO Director-General John G Bernander was far less positive about the result. Although also welcoming the negotiated settlement, Bernander’s press release confirmed that he was “more hesitant regarding how much the result accommodates itself with companies’ competitiveness.” Speaking to newspaper VG, he pointed to the tourist industry in more remote areas as one of the sectors “exposed to competition” that would find the results “difficult.” He added that he “expects that restraint will be shown towards companies that are in a financially difficult situation” when the negotiations continue at the local level. Before this year’s negotiations, Bernander had called on unions to consider a wage freeze in order to protect Norway’s international competitiveness.

This year’s negotiations occur midway through the 2010-2012 period, meaning that only the issue of wages is officially on the table. The so-called mellomoppgjør only involves the national representative organizations in the beginning, before opening to other discussions. The commercial sector will start negotiations next week, followed by health and local government employees, who have a deadline of May 1 to reach a deal. Many are predicting that these negotiations will be more difficult because most of these employees have already received wage increases this year, with many local municipalities wary of paying out above levels predicted in their budgets.

Views and News from Norway/Aled-Dilwyn Fisher
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