Collective bargaining agreements in Norway play a pivotal role in regulating salaries and other working conditions in the Norwegian labour market, with LO and Norway’s other umbrella union YS responsible for leading the main talks from the union side. 

The two sides have set a deadline of March 21st for an initial deal, with mediation to follow and a strike possible on the week starting April 8th if a deal is not reached.

“This year it’s the money that counts. People have gone through expensive times and interest rate increases, and can really feel that their wages are going less and less far,” Jørn Eggum, LO’s leader told the NTB newswire as he arrived for the talks on Monday. “This year we want to have a wage increase that is above the increase in prices.”

Time for a ‘proper collective agreement’ 

LO has complained that it was forced to hold back in 2022 and 2023 due to high inflation, with the coronovirus pandemic limiting its freedom of action in 2020 and 2021. 

“Fortunately, the day has come for us to start a proper collective agreement like in normal times. We don’t have a major oil crisis or a pandemic or a war, ” Eggum said. “So this bodes well for a good settlement, when the industry is booming.” 

What are unions demanding? 

Norway’s unions are demanding a real pay increase for workers, after the three years of falling or stagnating real wages. As the Technical Calculation Committee, the government committee tasked with calculating wage and inflation rises, is forecasting consumer prices inflation of 4.1 percent in 2024. 

LO has left the exact amount hazy, while YS has said it is looking for members to get a pay rise of more than 5 percent. 

LO is also calling for an additional pay rise for workers on the lowest salaries, the class as “below 90 percent of the average industrial worker’s salary”.  They are also calling for reforms to help workers take additional education to help their skills keep pace with technological development, with a right to full pay when taking such courses. 

Finally, they are calling for the right to paid leave to take children under the age of twelve to a doctor or dentist. 

What are businesses demanding? 

For Norwegian businesses, the focus is on limiting pay increases as much as possible. 

“We have relatively few demands, so we have printed out many copies so it looks a bit thicker,” Knut Sunde, the negotiator the Federation of Norwegian Industry said as he haded over the documents to Eggum. 

The federation is demanding that wages do not rise to such as extent as to damage Norwegian competitiveness or lead companies to employ fewer staff.   

Will a real wage rise fuel inflation? 

Thomas von Brasch at Statistics Norway has warned that a real wage increase of one percent would increase Norway’s inflation rate by 0.2 percent, potentially causing Norges Bank to delay interest rate cuts. 

If this happens, several economists argue that anyone living in Norway with a significant mortgage may end up losing more in increased interest rate payments than they gain in increased salary. 

“A family with high debt will be more affected by changes in interest rates. They might lose all the extra wage growth because it will be eaten up by higher interest rates and inflation,” Kyrre Knudsen, chief economist at Sparebank 1 SR-Bank, told TV2. 

What will the strike look like if it starts in the week of April 8th? 

Neither LO nor YS have given details on which sectors of the economy would be the first to go on strike if an agreement cannot be reached, with their plans unlikely to be revealed until the end of the mediation period over Easter.