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WORKING IN NORWAY

Could a long period of stagnant real wages in Norway be about to end? 

Norway’s unions and employer organisations will soon thrash out terms on this year’s collective bargaining agreements. Many expect workers to see a real wage bump. 

Published: 20 February 2024 13:18 CET
Pictured is a person holding a handful of kroner.
Workers in Norway are likely to secure a real wage increase in 2024. Pictured is a person holding a handful of kroner. Photo by Andrzej Rostek Getty Images

Real wages, which account for how much salaries rise in line with inflation, for many workers in Norway have remained stagnant over the last decade. 

Last year saw real wages in Norway fall, according to The Technical Calculation Committee for Income Settlements (TBU). The government committee calculates price and wage levels and wage growth in various industries in Norway. 

When accounting for inflation, wages fell by 0.2 percent last year, according to the TBU’s figures. A surprisingly weak krone throughout 2023 contributed to the higher than initially forecasted inflation figure of 5.5 percent, while workers on average secured a 5.3 percent wage increase. 

Norway’s national data agency, Statistics Norway (SSB), reported last year that real wage growth in the country slumped to the lowest level seen since the 1980s. It calculated that by the end of 2023, workers in the country would only be marginally better off than they were in 2015. 

Real wage decreases weren’t the reality for everyone last year, and recent figures from Statistics Norway show that several groups saw significant increases. 

READ MORE: Which professions in Norway have seen the largest and smallest pay rises?

Trade union umbrellas have reiterated several times this year that the overall goal for 2024 was an increased real wage increase after several lean years. 

“It is clear that many of our members put their trust in a solid wage settlement. And it will be our task not to disappoint them,” Peggy Hessen Følsvik, leader of The Norwegian Confederation of Trade Unions (LO), told public broadcaster NRK. 

“After years of high inflation and an increasingly tough interest rate level, increased salaries are the most important thing for our members,” she added. 

The TBU estimates that prices will rise by 4.1 percent in 2024, meaning that any wage rises would need to exceed this to meet the unions’ goals. 

Wage negotiations begin on March 15th, and the LO leader has said that it is prepared to take union members out on strike to secure its terms. 

“We are prepared to strike to take what is fair. We must have our share of the cake, and we must have a fair distribution,” Følsvik said. 

READ MORE: Will this year’s wage settlement negotiations lead to strikes in Norway?

LO is expected to set its final salary demand at well over five percent to secure a real wage increase if inflation once again ends up being higher than forecast. 

Negotiations between the state sector and state and municipal employees are expected to be more challenging. Last year, state employees secured an overall wage increase of 6.4 percent on average. 

Norway’s central bank, Norges Bank, has previously forecast wage increases of 5 percent in Norway in 2024. This amounts to a raise of 30,000 kroner for an employee with a salary of 600,000 kroner per year. 

Heading into future years, one key figure could be that wages now make up a much smaller share of companies’ overheads compared to 20 years ago. Wages comprise around 71 percent of a company’s cost compared to 80 percent two decades ago. 

“We have seen a trend over the years now where the wage share has decreased. We cannot continue with that. We have to reverse this development,” Følsvik told Norwegian newswire NTB.

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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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