– We think wage growth will end at 5.2 per cent. And it can actually be even higher. This is what senior economist Sara Midtgaard at Handelsbanken tells news. She believes this year’s wage settlement will ensure real wage growth for most people. – The labor market is still tight. There are still two vacancies per job seeker, she emphasises. At 10 o’clock today, the mediation between the employers’ organization NHO on the one hand and the employee organizations LO and YS on the other will start. The parties will negotiate the wages of just over 200,000 employees in the private sector. If they do not agree, 24,500 workers will be taken out on strike on Sunday. The workers’ organizations LO and YS have announced that they will take 24,500 workers out on strike on Sunday, if the parties do not agree during the mediation. The picture is from the National Association of Private Kindergartens’ strike last autumn. Photo: Stian Lysberg Solum / NTB Demands a minimum of 5 per cent more Ahead of this year’s settlement, LO has announced three main demands: Real wage growth Equal pay Low wage supplement To ensure real wage growth, wages must increase more than price inflation. An expert committee (TBU) has estimated that price growth in 2023 will end at 4.9 per cent. Thus, wages must increase by 5 per cent or more, so that purchasing power is not weakened. In the last 7 years, the overall real wage growth has been 0.5 per cent. – Roughly speaking, one can therefore say that there has been no real wage growth since 2015, said TBU leader Geir Axelsen to news earlier this week. Not since the 1980s have Norwegians had such weak wage growth, writes NTB. A weak krone can lead to higher wages Chief economist Kjersti Haugland at DNB believes wage growth will end up somewhere between 5 1/4 and 5 1/2 per cent this year. – In that case, it is the highest wage growth we have had in 15 years, she emphasizes. Haugland believes that there are several factors that pull in that direction. – Wage earners demand compensation for high price increases. Good profitability in the industry as a whole testifies to good earning capacity. And the bargaining chips for wage earners are good, with the strong labor market we still have, she says. Chief economist Kjersti Haugland at DNB expects the highest wage growth in 15 years. Photo: Martin Fønnebø / news – How is the salary settlement affected by the weak krone exchange rate? – One of the reasons why price growth is estimated to be as high as 4.9 per cent is a very weak krone exchange rate. Midtgaard at Handelsbanken points out that the weak krone exchange rate contributes to creating wage pressure in the Norwegian economy. – The competitive sector is becoming more robust, which can therefore push wages up. When the krone is weak, the oil and fishing industry, for example, gets more in return for the products they export. – This makes them more robust, and therefore can withstand paying higher wages, she says. Senior economist Sara Midtgaard at Handelsbanken believes wage growth will end at 5.2 per cent this year. Photo: Handelsbanken – Will have its share of the cake Nordea Chief Economist Kjetil Olsen believes this year’s salary settlement will reach up to 5.3 per cent. – The employees have been very clear that this year they will demand increased purchasing power. This means that they must have at least 5 percent. Norwegian business has had good profitability in the past year, Olsen points out. – The employees’ share of value creation has fallen, and the employees will now feel that they should have their share of the pie. In sum, this indicates a rather high salary settlement this year. – Are there not good reasons to demand an even higher settlement? – Based on experience and the state of the Norwegian economy with the low unemployment we have, you could have quickly thought that wage growth would have landed at 6-7 per cent, says Olsen. Nordea’s chief economist, Kjetil Olsen, believes that LO has the strongest cards in its hand in this year’s settlement. Photo: Tom Balgaard / Tom Balgaard/news But the employees’ side will take into account that their wage growth will affect price increases further on, the chief economist believes. – And the higher Norges Bank may have to set the interest rate, which in due course will lead to increased costs for many who have loans. Unemployment may then rise more than it would otherwise have done. – So I think the employees will take into account that they cannot ask for too much salary, adds Olsen. Increased food prices The comparison of food prices and the wage trend says something about whether you get more, less or the same amount for your money. When the development of food prices is higher than the development of wages, it means that food has become more expensive. Both figures are averages for the specified period. Read more about sources and reservations here. How much food prices have increased in the past year, compared to wage developments
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Economists expect the highest wage settlement in 15 years – news Norway – Overview of news from different parts of the country
