After months of rumbling from both sides, Norwegian trade unions and employer organizations have finally begun what long were expected to be tough negotiations over wages and benefits. Now they’re likely to be even tougher, after Russia’s war on Ukraine has raised prices, uncertainty and even fear.
Both private- and public sector employees are demanding raises that will boost their purchasing power. After years of moderation despite Norway’s strong economy and profitable businesses, they’d expected to prevail since price growth expectations just last month were only around 2.6 percent.
Then Russian President Vladimir Putin ordered an invasion of Ukraine, and everything changed. Norwegian industry, which continued to do well even during the Corona crisis, is suddenly facing record-high energy costs and questionable demand. While Norway’s oil and gas sector is pumping up record profits, because of sanctions and bans on Russian oil and gas, other sectors are suddenly struggling because of supply-chain disruption and declines in demand.
“The war can mean that expected global growth comes to a halt,” claims Stein Lier-Hansen, leader of the industrial employers’ organization Norsk Industri. It’s to his advantage to paint as poor a picture of the situation for business as possible, but he can document that several large companies are already seeing business dry up and costs rise, and some are warning of layoffs. “We’re in a very bad spiral,” according to Lier-Hansen, who earlier has suggested that raises of 3.5 percent would be the maximum his organization would offer.
‘Clear marching orders’
His counterpart at large industrial trade union federation Fellesforbundet, Jørn Eggum, claimed he was heading into labour talks on the offensive, “with self-confidence and clear marching orders from our members. We will strengthen purchasing power for our members and make sure those with low pay get extra raises.” He and other union leaders have also pointed to members’ high electricity bills, rising food prices and an overall consumer price index that was up 5.1 percent late last year.
Concrete wage and benefit demands would come later, as negotiations continue through the next week. This first major round of talks involving so-called “frontfag” players is important because it sets the framework for negotiations in all other sectors.
It’s in the public sector where the threats of strikes is highest, though, especially among teachers and nurses. They’ve been on the front line during the Corona crisis and have made it clear that applause and grateful words for their work isn’t enough. Nurses especially finally want the significant pay growth they’ve sought for years, only to be ordered back to work by government officials when their strikes are determined to pose a danger to life and health.
Nurses union leaders, organized through the trade union federaton Unio, claim they’re effectively denied the right to strike. They’ve also been defying the labour federations’ traditional loyalty to let the so-called “frontfag” industrial negotiations set terms for them. Raises of even 3.5 percent are nowhere near what nurses earning around NOK 500,000 (USD 55,000) want.
Newspaper Klassekampen reported on Thursday that the risk of major conflicts between the public sector union federations and employer organizations is high. The unions can also point to weak pay growth over the past several years, even at a time when Norway’s economy and tax base has been strong. Their negotiations begin in early April.
Labour shortage can help workers
One key factor can help the cause of workers in both the private and public sectors: a labour shortage in Norway. Lots of foreign workers who were active in everything from health care to the hotel and restaurant business left Norway during the Corona crisis, or were blocked from entering the country. That’s resulted in Norway having what even former Prime Minister Erna Solberg has described as “too many jobs and not enough workers.” That can put pressure on wages, and force employers to sweeten their offers.
“Ordinary workers are holding better cards than they have for a long time,” wrote Hannah Gitmark, head of the left-leaning think tank Agenda, in newspaper Dagsavisen on Februay 28. That was also after Russia’s invasion of Ukraine, which may bring more refugees into the job market but also delay the return of other foreign workers.
Norway’s largest trade union federation LO is demanding increased purchasing power for all workers. “The fast majority of businesses are still doing well, and our members must receive their fair share of the growth,” LO leader Peggy Hessen Følsvik has claimed to Norwegian media. She vows to put a priority on equal pay and a boost for the lowest paid, not least at a time when executive pay has soared as have bonuses in both the public and private sector.
If no agreements are reached during the first rounds of labout negotiations, mediation will begin and last until April 30. That means any strikes would likely occur in May.