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WORKING IN NORWAY

Should workers in Norway expect another real wage decrease this year? 

One of Norway's leading unions has said that it will push to prevent a real wage decrease in collective bargaining negotiations. But how likely is this to happen, and will workers be better off this year than last year? 

Published: 22 February 2023 12:50 CET
Pictured is a person opening a wallet.
One of Norway's leading unions has said that it will push for a real wage increase. Pictured is a person opening a wallet. Photo by Alicia Christin Gerald on Unsplash

Government figures released earlier this week show that wages rose by around 4.1 percent last year. However, inflation in Norway outgrew wages, with the consumer price index in Norway rising by 5.8 percent between the end of 2021 and the end of 2022.  

Overall, this means that workers in Norway saw their wages fall in real terms last year. The government’s figures say that real wages, after taxes were accounted for, decreased by one percent last year.

This year, the government expects inflation to be around 4.8 percent. There is uncertainty surrounding this forecast due to fluctuating prices, the war in Ukraine and how the krone performs. The estimate will be updated in mid-March. 

The Norwegian Confederation of Trade Unions (LO), one of the largest union groups in the country, has said that it will push for a real wage increase and more purchasing power for its members in collective bargaining talks, business news publication E24 reports. 

Using the government’s forecasts would equate to a wage rise of almost five percent or more. LO will meet with the employer organisation, the Confederation of Norwegian Enterprise (NHO), in a month for provisional talks over collective bargaining agreements. 

It will also push for public sector workers and other employees who have seen lower wage development in recent years to see the biggest increases. 

“They have been lagging behind others for the past three years. Therefore, I think they should get more than the front subject this year,” head of LO Peggy Hessen Følsvik told public broadcaster NRK. 

Still, the NHO has warned that using inflation as the basis for wage negotiations could be considered short-sighted as several companies under its umbrella expect weaker results, lower investment compared to the previous year, and increased job cuts. 

READ MORE: What is a Norwegian collective bargaining agreement?

“The future prospects are perceived as bad for many. The frontline model assumes that it is the companies’ ability to pay that should be the basis for the wage settlement – not the price increase,” Nina Melsom, director for working life and tariff agreements in the NHO, told NRK. 

Meanwhile, Norsk Industri, the largest group within the NHO, has told the Norwegian newspaper VG that the absolute limit it will be able to offer workers in 2023 would be a salary increase of up to 4.5 percent. Should the government forecasts be accurate, this would equate to a real wage decrease increase in 2023. 

Therefore, for a real wage rise to be achieved, it would require tough negotiations. Should negotiations fail to lead to an agreement, the unions can call strikes and industrial action to try and secure more favourable terms. 

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WORKING IN NORWAY

Why overqualified foreigners in Norway struggle to find work

Norway is one of the worst countries in Europe when it comes to overqualified foreign labour being stuck in jobs that don’t make the best use of their skills, a new analysis has found. 

Published: 23 April 2024 11:38 CEST
Why overqualified foreigners in Norway struggle to find work

Norway is one of many European countries struggling with “brain waste”, which is where immigrants struggle to find suitable full-time work or are overqualified for their roles due to their education not being recognised. 

The findings are part of an investigation by Lighthouse Reports, the Financial Times, El País and Unbias The News that found that most European countries fail to provide good job opportunities to educated foreigners – potentially at the cost of their labour forces and economies. 

“While the results differ slightly between labour market outcomes, a consistent pattern emerges: immigrants lag behind natives everywhere, but brain waste is worst in Southern Europe, Norway, and Sweden,” the report read. 

Some of the metrics used to measure brain waste were the proportion of foreign residents who were overqualified for their role, underemployed (meaning they weren’t working as much as they could), or unemployed. 

In Norway, 27.6 percent of university-educated Norwegians were overqualified for their roles, according to the report. Meanwhile, just over half of the university-educated immigrant population were overqualified for their job. 

This figure made Norway one of the countries with the largest raw difference in the percentage of the native population being overqualified compared to the immigrant population. 

Furthermore, the number of immigrants who were underemployed, 3.9 percent, was more than double the rate of Norwegians in the same position. 

The investigation used figures from Eurostat between 2017 and 2022. 

Norway’s Directorate of Integration and Diversity has recently investigated the obstacles facing the country’s foreign population in the workplace. 

Its report found that immigrants faced barriers both when trying to progress their careers or simply trying to get their foot in the door. 

Immigrants working in Norway were also more likely to leave working life earlier or lose their jobs. 

READ ALSO: The biggest barriers foreigners in Norway face at work

Factors such as working in temp positions, physically taxing occupations, and industries exposed to economic turbulence contributed to this. 

However, a lack of Norwegian proficiency, a lack of relevant skills and poor health also played a part. 

Discrimination prevented immigrants from entering the workplace and affected those who were employed. 

“More and more people in the population have contact with immigrants in working life, and most experience that contact as mainly positive. At the same time, one in four immigrants has experienced discrimination in the workplace, and this discrimination can occur in different forms and in different working situations,” the report read.

The directorate also said that most companies didn’t have concrete measures to try and promote diversity.

One factor holding back immigrants in Norway was their Norwegian language skills, the report said. 

While Norwegian skills were moving in the right direction, less than half of foreigners in the country had advanced Norwegian language skills (level B2 according to the European framework) after completing language training.

Meanwhile, Lighthouse Reports’ investigation found that brain waste in Norway varied from profession to profession. For example, Norway was one of a number of countries where college-educated immigrants were more likely to be doctors. 

Immigrants with a university education in IT-related subjects were also far less likely to be overqualified. There, the difference between migrants being overqualified compared to natives was just 2 percent. 

However, physical and engineering science technicians, engineering professionals (excluding electrotechnology), and those who have studied education at a university level were the immigrant groups in Norway most likely to be overqualified. 

One thing to note is that immigrants who obtained their qualifications in Norway were far less likely to be overqualified than those who got their degrees outside of Norway, even if they still fared worse than natives overall. 

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