Gerd Kristiansen, the head of Norway’s largest trade union federation LO, is warning union members not to expect any big pay raises this year. The chief economist of one of the country’s major banks, meanwhile, believes Norwegians’ won’t enjoy any growth in purchasing power for the next five years.
“There’s uncertainty in the outlook ahead,” Kristiansen said as labour organizations geared up for this year’s negotiations with employers’ organization NHO. “We have sectors where things are quite tough right now, with layoffs and furlough. I must be very clear that no one can expect any big pay increases this year.”
It was an unusual thing for a labour leader to say, as she headed into collective bargaining sessions this week with those representing employers in Norway. The annual national negotiations generally set the parameters for pay and benefit talks at the local level, so it’s been more common for union bosses to make tough demands at the outset. Not this year.
“I think it’s important to say this now, ahead of us sitting down at the bargaining table,” Kristiansen said. She did tell Norwegian Broadcasting (NRK) Monday morning, however, that LO will make efforts to boost the pay of those with the lowest salaries. Most everyone else will likely need to settle for very modest salary hikes, if any at all, as Norway’s economy and its dominating oil and gas industry grapples with oil prices that have been cut in half since last summer.
The LO leader’s conciliatory tone comes just after state statistics bureau SSB reported that average annual wage growth amounted to 3.1 percent last year, the lowest level since 1978. Next come statistics from a commission (Tekniske beregningsutvalget, TBU) that also examines wage development. On Tuesday, Kristiansen and LO officials from around the country will meet to formulate and officially set the demands they’ll present to NHO.
“We don’t expect to see very high numbers when TBU delivers its figures,” Kristiansen told news bureau NTB, promising that LO “will do our part” to resist making demands that can put jobs in danger.
Harald Magnus Andreassen, chief economist at Swedbank, doesn’t expect to see any lucrative wage settlements for workers this spring either. After 15 years of strong wage growth, Andreassen told newspaper Dagens Næringsliv (DN) that he sees five years of little if any growth in purchasing power.
“It’s important that we don’t pretend this (low pay growth) is temporary,” Andraessen told DN. He thinks the Norwegian economy is at a crossroads, and that the boom years are over because of lower oil prices, lower growth in productivity and less activity on the Norwegian Continental Shelf.
“This is a new direction, not just a bump on the road,” he said.