Living and working in Norway

It was the first time since World War II that a mid-term settlement between the peak-level confederations, the Confederation of Trade Unions (LO) and Confederation of Norwegian Enterprise (NHO), resulted in a strike. The collective agreements are renegotiated every second year, in which the parties have a mutual right to demand a revision of wage and employment terms for the second year of the agreement (mid-term).

Part of the explanation for the strike is the considerable frustration that has built up among large parts of the population. The war in Ukraine has led to high electricity prices and increased food costs, while interest rates have risen sharply. As many Norwegians have substantial loans, this has had severe consequences for private finances. Wages have not managed to keep pace. ‘We have to go back to the 1980s to find such weak wage development over such a long period,’ wrote Statistics Norway in its economic analysis in March. On top of this, employees and the trade unions have reacted strongly to the fact that executive salaries in many industries have increased significantly in recent years, in addition to large bonuses being awarded to highly paid individuals.

Still, despite harsh words before and during negotiations and the strike, the social partners in the private sector demonstrated their strength by collectively taking steps to ensure that workers with the lowest earnings received wage increases and by managing to maintain coordinated wage determination despite high inflation.

Confidence in the ability of the current government led by Jonas Gahr Støre to navigate in difficult times is lacking, which contributed to a very poor election result for the coalition. The government has been criticised for high inflation and increasing inequality and poverty, among other things. During 2023, record-breaking queues for free food distribution at volunteer organisations and the delayed and inadequate support to the population to pay their electricity bills received much public attention. At the same time, Norway had record-high revenues as a result of the export of oil and gas.

The Labour Party had its worst election result since 1924, receiving 21.6% of the vote. The largest trade union confederation, LO, has a formal cooperation agreement with the Labour Party, which is now in government with the Centre Party. The trade union movement did point out that the government has delivered on several issues that are important to employees. This includes, not least, the tightening of the rules for hiring labour from temporary agencies. The hiring of workers in the construction industry, most of whom come from countries in central and eastern Europe, has raised concerns about deteriorating wages and working conditions in the industry in recent years. The regulatory changes were implemented despite strong opposition from the employer side. So strong have the reactions been that it could potentially have a negative impact the cooperation between the parties in the future.

The need for further education and training, due especially to the green transition, is an important part of the public debate and is likely to become even more prominent in the years to come. The same applies to efforts to get more people into employment. The number of disability benefit recipients is very high, while many businesses are experiencing labour shortages. This is one of the main tasks to solve for both politicians and the social partners.