2.7% pay raises helped avert strike

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Marathon mediation through the weekend finally warded off a major strike in Norway that would have pulled more than 30,000 workers off the job and distrupted ferry- and bus service around the country. The breakthrough came after Norwegian national employers’ organization NHO gave up a controversial claim that would have resulted in a loss of purchasing power for most union members.

NHO leader Ole Erik Almlid (left) and LO leader Peggy Hessen Følsvik (right) posed with state mediator Mats Wilhelm Ruland (center) after marathon mediation resulted in a wage settlement Sunday afternoon. PHOTO: LO

The employers and Norway’s large trade union federations LO and YS kept talking for 14 hours after a midnight deadline in the mediation that began late last week. New LO leader Petty Hessen Følsvik, who suddenly had to take over following the death of her predecessor Hans Christian Gabrielsen just a month ago, had said the labour movement “went into mediation with a goal of coming to agreement.”

Both sides faced the toughest negotiations in years.  NHO leader Ole Erik Almlid had continued to claim that employers couldn’t afford more than 2.2 percent across-the-board pay raises, much less than the expected cost-of-living that most Norwegian economists have set at 2.8 percent. Almlid also had claimed employers were not in a position to grant extra raises to those with the lowest incomes after a year of the Corona crisis.

Economy still strong
Many sectors of the Norwegian economy have, however, continued to perform well through the crisis. Some, not least the grocery store business, have reported record-high profits, while the state dairy monopoly Tine has seen so much production and revenue growth that all employees are getting bonuses of NOK 10,000 (USD 1,200). The brewery-, seafood- and especially salmon industries have also been doing well, housing prices have skyrocketed, oil prices have recovered and even offshore yards have strong orderbooks. While Norway’s gross national product declined 0.8 percent last year, the International Monetary Fund (IMF) and most economists expect renewed and even strong growth later this year, just as soon as Corona containment measures are eased.

Many workers, politicians and commentators on both sides of the political spectrum thus viewed Almlid’s and NHO’s claim as unreasonable if not downright greedy. The travel, tourism, restaurant and bar industries have been hit the worst, and NHO seized on them to justify its demand for raises below the cost of living.

Both sides made concessions
In the end the employers’ group relented, with Norwegian Broadcasting (NRK) among the first to report Sunday afternoon that NHO and LO agreed to raises of 2.7 percent with the lowest paid getting an extra krone (about 12 US cents) an hour. LO had to relent as well, since workers still won’t see their pay rise as much as prices, but it’s closer to what LO called a “zero-settlement” at 2.8 percent. NHO was most concerned with keeping Norwegian businesses competitive, insisting that wages were rising only around 2.2 percent among many of Norway’s trading partners.

Even though Følsvik had to concede that LO’s demands weren’t meant either, she told reporters that a strike “also would have also cost our members dearly. We’re not going to take thousands of people out on strike for 30 øre (the equivalent of the 0.1 percentage point LO gave up).” She said negotiations were “very tough,” perhaps the toughest she’s experienced in her career.

“LO wants to counter rising (social) differences, and those with the lowest pay risk hanging after everyone else,” Følsvik said, but added that “this is a solution that secures good pay growth for the lowest paid.” Almlid also said he was “satisfied” with the settlement, even though “I think many of our companies would gladly have seen raises of zero. They’re struggling and many of their employees have been laid off.”

Average raises of less than NOK 5,000 a year
The across-the-board settlement is retroactive to April 1 and amounts to average raises of around NOK 4,387 per year for around 180,000 workers in LO-organized and NHO-run companies, plus NOK 1,900 for the lowest paid. Local negotiations can boost that, while the national wage framework hammered out over the weekend also sets the tone for more upcoming labour negotiations in other industries with workers organized in various trade union federations.

Mediator Mats Ruland confirmed the two sides had been far apart when mediation began but said he’d remained “optimistic” throughout that a deal would be agreed. “This has been extra-tough mediation,” Ruland said, adding that both sides took on “great responsibility for finding a solution.” No one wanted a strike after one of the toughest years in Norway since World War II.

NewsInEnglish.no/Nina Berglund