Labour representatives for more than 32,000 workers in Norway’s retail and service industries came to terms with the workers’ employers organization Virke on Tuesday. It’s the second surprise settlement that didn’t even require help from the state mediator.
Like those earlier representing private and public sector workers, the workers’ unions accepted Virke’s wage offer of an average 5.2 percent that also provide for some local variation. Virke in turn agreed on Tuesday to meet demands from Norway’s largest trade union confederation LO and labour federation YS, after what Virke called “constructive negotiations” that avoided a major strike.
LO played a decisive role in the country’s initial round of industrial negotiations earlier this spring. A sweetened offer from employers set the framework for the 5.2 percent pay hikes that ended a four-day strike.
That set the tone for ongoing collective bargaining, which also has resulted in similar pay raises in the public sector. Strikes there had been widely expected but the government suddenly came up with more funding for police, hospitals and defense in its revised budget. The money came almost directly out of the country’s pumped-up Oil Fund that also spreads to local governments.
The government justified the use of more oil revenues as a means of compensating for high prices and energy rates and that in turn allowed local government employers to sweeten their offers to around 400,000 employees especially at the schools. For the first time in a long time, even teachers and nurses were satisfied.
“It almost can’t be believed,” editorialized newspaper Dagens Næringsliv (DN) last week after the state and local government workers suddenly settled for wage hikes than can amount to 5.4 percent or even more. The local governments’ representatives have warned that it would be difficult to meet the unions’ demands but they did, and there’s been little debate afterwards. Public and political sentiment was clearly on the side of the workers who haven’t kept up with the cost of living, and no one wanted more long teachers’ strikes like the ones last year.
“It would have been unreasonable if workers in the public sector didn’t get the same pay growth as in the private sector, at a time when higher prices and interst rates have hurt households’ economy,” wrote DN, Norway’s largest business daily. Neither DN nor business criticized the use of more oil money, not least since meeting teachers’ and nurses’ demands would have forced cuts elsewhere.
Then interest rates also rose again, which likely contributed to Virke’s willingness this week to offer 5.2 percent raises. Now there are even predictions that actual pay growth may be higher than expected, perhaps as high as 5.5 percent after locally negotiated wages are set. Many Norwegian businesses were highly profitable last year and companies need workers, so employers are more likely to give in to demands.
“Experience shows that when there’s a major lack of workers, unemployment is low and profitability is good, final (local) wage pacts can end up higher than the negotiated framework,” Kjetil Olsen, chief economist at Nordea Markets, told newspaper Aftenposten on Monday. News of the settlements with Virke followed by less than a day.