Read news from:
Austria
SHARE
COPY LINK
For members

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.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

OSLO

Is Oslo’s project to speed up work permits on track?

The City of Oslo aims to cut work permit processing times in the capital down from nine months to just three days. The Local has contacted authorities to update readers on the latest developments.

Published: 6 May 2024 10:09 CEST
Is Oslo's project to speed up work permits on track?

For years, Norway has been grappling with a shortage of skilled professionals, notably in the technology and IT sectors.

Recognising the need to address this talent gap, The City of Oslo and other partners launched a pilot project in 2023 called Kompetansespor (Competence Track).

The primary goal was to reduce the lengthy wait times for skilled workers to get work permits from around nine months to three days.

READ ALSO: What’s next for Oslo’s plan to slash work permit waiting times?

But what is the current status of the project? And is the new super-fast work permit process any closer to becoming a reality?

How the project has evolved in 2024

Since its inception, Competence Track has evolved into a more ambitious project that goes beyond just cutting work permit times.

The project’s focus has shifted towards new goals, which mostly revolve around exploring the use of a “digital wallet” to streamline the immigration process.

To make this happen, partners involved in the project, such as the Norwegian Directorate of Immigration (UDI), will collaborate with other key stakeholders from the governmental, municipal, and private sectors.

READ MORE: How Norway’s permanent residence rules have been tweaked

As the UDI explains in a document seen by The Local, a digital wallet refers to “an electronic application or platform that allows users to securely store, manage, and share digital identity credentials and other types of digital data,” which plays a “central role in handling digital evidence or verifiable credentials in a digital ecosystem.”

The wallet allows relevant authorities to access the holder’s paperwork, rather than having documents and credentials stored separately across several portals. 

New goals

The main aim for 2024 is to develop and explore an efficient and user-friendly process flow that can support the immigration of skilled workers to Norway.

According to a document that the Norwegian Directorate of Immigration (UDI) shared with The Local, other goals for the year include creating a prototype to test the efficacy of the digital wallet in improving immigration processes, investigating the feasibility of pre-qualifying employers to speed up the immigration process, and showcasing how collaboration across sectors can create better services for users.

The project remains committed to reducing administrative burdens, processing times, and information exchange accuracy, as well as preparing Norway for future challenges related to global mobility and digitalisation.

Meanwhile, the Oslo Business Region writes on its website that additional target groups such as students and family members of work permit applicants would be included in the fast track residence permit scheme. 

From the information available at the time of writing, it seems that project will still revolve around Oslo.

Gustav Try, an advisor at the Norwegian Directorate of Immigration (UDI), told The Local that the UDI’s Department of Managed Migration is currently working on a new test phase called “Pilot 2.0”.

“We are currently working on Pilot 2.0, but it is not finalised. The plan is to pilot it on selected students at the University of Oslo (UiO) in August. We are also considering piloting it on skilled workers, including UiO employees, throughout the autumn,” the department said.

Back in September, Thea Ullhaug Pope, senior content developer for the City of Oslo, told The Local that one of the long-term ambitions of the project is to try and get the scheme adopted by other regions and then nationally.

However, while the Competence Track project continues to progress, it seems unlikely that the initial ambition of reducing work permit waiting times from nine months to three days will be achieved on a mass scale anytime soon.

SHOW COMMENTS