The average wage growth of Norwegian wage earners from 2006 to 2007 was 5.4%, according to new figures published in the annual report (in Norwegian, 1.05Mb PDF) [1] of the Norwegian Technical Calculation Committee for Wage Settlements (Tekniske Beregningsutvalget for Inntektsoppgjørene, TBU) on 4 April 2008. Prior to the publication of the interim report on the 2008 wage bargaining round, TBU issued a press release (23Kb PDF) [2] on 18 February, highlighting the main points of the report. The report points to the fact that the last time Norwegian workers saw a similar increase in wages was in 2002, when the overall wage growth rate for all employees was 5.7%.[1] http://www.regjeringen.no/upload/AID/publikasjoner/rapporter_og_planer/2008/TBU_2008_hele.pdf[2] http://www.regjeringen.no/upload/AID/temadokumenter/inntekt/TBU pressemeld engelsk.pdf
The latest annual report of the Norwegian Technical Calculation Committee for Wage Settlements estimates the average wage growth of Norwegian workers from 2006 to 2007 at 5.4%, compared with 4.1% in 2006. The 2007 increase in real wages is estimated at 4.5%, compared with 1.9% in the previous year. Moreover, the report highlights that the gender wage gap has decreased in most sectors, with the exception of a few.
The average wage growth of Norwegian wage earners from 2006 to 2007 was 5.4%, according to new figures published in the annual report (in Norwegian, 1.05Mb PDF) of the Norwegian Technical Calculation Committee for Wage Settlements (Tekniske Beregningsutvalget for Inntektsoppgjørene, TBU) on 4 April 2008. Prior to the publication of the interim report on the 2008 wage bargaining round, TBU issued a [press release (23Kb PDF)](http://www.regjeringen.no/upload/AID/temadokumenter/inntekt/TBU pressemeld engelsk.pdf) on 18 February, highlighting the main points of the report. The report points to the fact that the last time Norwegian workers saw a similar increase in wages was in 2002, when the overall wage growth rate for all employees was 5.7%.
Variable wage growth between sectors
The average annual wage growth of 5.4% for 2007 represents a substantial rise compared with the 4.1% growth rate recorded in the period 2005–2006 (NO0703029I). This is the first time in five years, namely since 2002, that an equivalent wage growth has been recorded in Norwegian working life. However, significant variations in wages can be found between different sectors of the national economy (see Table below).
Wage growth in companies affiliated to the Confederation of Norwegian Enterprise (Næringslivets Hovedorganisasjon, NHO) was 5.5% for blue-collar workers and 5.7% for salaried employees in the same companies. Most of these companies can be found within the so-called ‘trend-setting trades’ – those companies establishing the economic framework for negotiations in other areas of Norwegian working life (NO0408103S - doc, 55 Kb). The wage growth rate of employees in companies affiliated to the Federation of Norwegian Commercial and Service Enterprises (Handels- og Servicenæringens Hovedorganisasjon, HSH) was estimated at 5%. In the financial services sector, which mainly includes employees working in the banking and insurance fields, wage growth was estimated at 5.2% in 2007. Employees in the central government sector witnessed an estimated 5.1% wage growth in 2007, while local government employees saw a wage growth of 4.8%. Annual wage growth in companies affiliated to the employer organisation for deregulated public enterprises Spekter (previously called NAVO and renamed Spekter in June 2007), excluding health enterprises, was estimated at 5.3% in 2007. The respective figure for health enterprises affiliated to Spekter was 4.9%.
| Groups of employees | Growth rate 2006–2007 |
|---|---|
| All groups | 5.4 |
| Hourly-paid workers in NHO-affiliated companies in manufacturing sector | 5.5 |
| Salaried employees in NHO-affiliated companies in manufacturing sector | 5.7 |
| Employees in HSH-affiliated companies in wholesale and retail trade sector | 5.0 |
| Employees in commercial and savings banks | 5.2 |
| Central government employees | 5.1 |
| Municipal and county employees | 4.8 |
| Health enterprises affiliated to Spekter – mainly hospitals | 4.9 |
| Other enterprises affiliated to Spekter | 5.3 |
Source: TBU, 2008
The TBU report presents new figures on the sectoral-level gender wage gap, and concludes that the gender wage gap has decreased in most sectors, with the exception of blue-collar workers in the manufacturing and municipal sectors. Figures on the overall wage gap between women and men in 2007 will be published in June 2008. In 2006, in relation to full-time employees only, women in general earned 86.8% of the average male income.
Price growth and real wage development
From 2006 to 2007, the consumer price index (CPI) increased by an average of 0.8%, which is significantly less than the 2.3% increase recorded from 2005 to 2006. The decline in price growth is due mainly to lower electricity prices. This decline has therefore led to an overall growth rate in consumer prices well below the average of 1.5% annually in the course of the last five years.
On the basis of these figures, the average growth in real wages (after tax) from 2006 to 2007 is estimated at 4.5%, compared with the 1.9% increase in real wages witnessed from 2005 to 2006.
Based on its calculations and assumptions, TBU estimates an average price growth (CPI) of about 3.5% from 2007 to 2008. This reflects the increasing price growth recorded over the last months of 2007 and early 2008.
Industry competitiveness and national economy
TBU also provides figures on the competitiveness of Norwegian industry in relation to the main trading partners. The average hourly wage costs – measured in common currency and covering only blue-collar workers – rose by 2.9% in 2007, which has contributed to a further weakening of the Norwegian manufacturing industry’s competitiveness in relation to the hourly wage costs of the main trading partners. As a result, the hourly wage costs in the manufacturing industry are estimated to be about 25% higher than a trade-weighted average of Norway’s EU trading partners.
The 2007 growth in gross domestic product (GDP) is estimated at 6%, compared with 4.8% in 2006. Moreover, the country’s unemployment rate has decreased over the course of 2007 and is estimated at 2.3% for the period from December 2007 to February 2008, compared with the slightly higher rate of 2.7% from November 2006 to January 2007.
Håvard Lismoen and Kristine Nergaard, Fafo Institute for Applied Social Science
Eurofound recommends citing this publication in the following way.
Eurofound (2008), Highest wage growth in five years reported, article.
