Another 9,000 people were registered as out of work in Norway by the end of September, prompting state statistics bureau SSB (Statistics Norway) to boost its overall unemployment rate to 4.6 percent. As consumer spending also fell, government officials are promising measures to help get people back to work in the new state budget.
Newspaper Dagens Næringsliv (DN) reported Wednesday that a total of around 128,000 members of the labour force are now without jobs in Norway, boosting the unemployment rate from 4.3 percent earlier this year and 4.5 percent most recently. SSB also reported a decline in consumer spending: A seasonally adjusted index measuring retail revenues fell 0.8 percent in September when it was expected to rise by 0.4 percent. One economist called retail spending “surprisingly weak, and that’s worrisome.”
State welfare agency NAV, which operates with a different method than SSB’s for calculating unemployment, registered another 5,000 people as applying for unemployment benefits and looking for work, but that figure doesn’t necessarily reflect the numbers who recently have lost their jobs in Norway. Many, especially in the oil and offshore industry, may resist registering at NAV and opt instead to live off severance packages or personal savings and look for new jobs on their own.
Investing in needed improvements, and creating jobs
Labour Minister Robert Eriksson of the Progress Party has been meeting with labour organizations and defending the conservative government coalition’s efforts to try to offset rising unemployment, much of it sparked by the slowdown in Norway’s oil and offshore sector. Eriksson recently addressed both the trade union federation LO, Norway’s largest, and Fellesforbundet, stressing how the government has set aside NOK 4 billion in its proposed state budget for programs to boost employment.
Eriksson complained to newspaper Aftenposten earlier this month that opposition Labour Party leader Jonas Gahr Støre “used an entire election campaign” to claim that the government was doing “too little, too late” to tackle unemployment. He countered that while Støre warned construction workers, for example, that they can face lengthy layoffs, the government has earmarked at least NOK 2.5 billion for renovation and construction of state buildings.
Around NOK 500 million is budgeted for rehabiliation of schools and nursing homes, NOK 480 million for railroad improvements and NOK 300 million for hospitals. The projects involved will require both construction workers and engineers, many of whom have lost their jobs in the oil industry.
“We’re spending money to fix up schools, hospitals and cultural properties,,” Eriksson, all of which is generally agreed to be necessary investment with the added benefit that the projects will create jobs at a time when they’re needed. Public sector projects had a hard time competing for workers during the oil boom years, when unemployment in Norway was only around 2 percent. Now more workers presumably will be available, at more reasonable cost.
‘New Deal’ for Norway
The goal, in what might be compared to a sort of “New Deal” for Norway in the spirit of the US’ Franklin D Roosevelt during the Depression, is to renovate neglected infrastructure in Norway while also creating short-term solutions to the effect of private-sector job losses until the economy picks up again. Norway is far from any hint of a Depression, but in relative terms, the pace of layoffs and the country’s economic downturn have raised concern.
Another NOK 960 million is earmarked in the state budget for business creation and innovation and more for other projects, including renovation projects at state-owned lighthouses along the coast. Eriksson and his government colleague, Transport Minister Ketil Solvik-Olsen, will also create jobs through major roadbuilding and highway improvement projects that could employ around 500 engineers.
The government’s proposed projects have won praise from employers’ organization NHO and cautious support from the labour organizations. The state budget battle is yet to get underway, but the Labour Party may be hard-pressed to object to Eriksson’s projects that would create jobs.