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Saturday, April 20, 2024

Overall pay growth lowest since the war

Higher prices in Norway cut into the modest pay raises received by Norwegian workers last year. That led to a large decline in purchasing power that labour unions want to correct this year.

After the last two years of economic downturn and lots of job cuts in the important oil and offshore industries, both labour unions and employers agreed that pay raises should be modest. Average pay raises amounted to 2.5 percent, but new numbers released by the state agency TBU, which calculates actual income growth, show that average overall income growth in Norway amounted to just 1.7 percent. That was the lowest level since the end of World War II in 1945.

What’s worse is that average price growth was up 3.6 percent and that was unexpected. Modest tax relief raised purchasing power a bit, but pay growth remained lower than price growth, so overall purchasing power declined.

The price growth was mostly fueled by a major hike in electricity rates, while food prices also edged up and imports were more expensive because of the weaker krone.

All told, workers lost out and that sets the stage for this year’s annual wage negotiations that are now getting underway. staff



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