Setting wages in NorwayNorwegian system for wage formation

– important preconditions

President Kari Sollien

Akademikerne

Reykjavik November 11th, 2016

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To understand the Norwegian model

� Trust and cooperation are basic values at all levels

� Norway has a wide scope of two- and tripartitecooperation, not only wages, for example:

� Pension/Occupational pension

� Sick-leave; Letter of Intent regarding a More Inclusive Working Life, the IA-Agreement

� Egalitarian wage structures are considered an advantage, the disagreements are basically about to what extent and at what level bargaining should take place

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Akademikernes wage policy..

� Our major goal is a wage policy based ondesentraliced/local collective agreements. This is theonly way wages can be used as a means to achieveresults for the company/enterprise.

Reality?..

� In the private sector wages for our groups are set at thelocal/company level

� Public sector – now also mainly local, this has been a long way..

� Exception: Municipality of Oslo - centralised

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Important structures

� Tripartite bodies – national level

� Government Contact Comittee

� TBU – permanent committee

� Working-life council

� Holden III 2013 - ad hoc committee

� Etc..

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The participants

� Since 2000: Participants in the national tripartitedialogue are the government, 4 employer organisations and 4 employee organisations

Women in charge

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Important instituitons

� Important institutions

� The National Mediator

� The National Wages Board

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� Norway has an open economy. Wage settlements must be based on what the international competitive sector can afford

� A major principle for all collective agreements in Norway is coordination and commitment to thetrendsetting industries

� Wage settlements in the «sheltered» sector/public sector must be based onthe competitive sector

The Norwegian model for wage settlements – trendsetting industries model

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� Wage growth for workers (white collarsincluded) in manufacturing firms affiliatedto NHO ( the largest employersorganisation) sets the norm/guideline for all pay growth

� The trendsetting industries are obligedto communicate an estimate of highcredibility to the rest of the social partners

� This guideline is neither top nor bottom, but a norm to adjust to in the long run

� The guideline only concerns wage growth, not profile

The Norwegian model for wage settlements – trendsetting industries model

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This model has so far led to

� Economic growth

� Low unemployment rates

� Even distribution of income

� High real wage growth

� We have avoided a wage –price spiral

� The Norwegian model –robust also during crisis

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� This guideline is neither top nor bottom, but a norm to adjust to over time

� The guideline only concerns wage growth, not profile

� Coordination takes place both at central and local level

� High level and broad scope of local negotiations and local union involvement

Important preconditions to Akademikerne

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Private sector – collective bargaining

� Annual, collective bargaining at company level about thesize of a lump sum based om pre – agreed criteria

� Pre-agreed criteria: usually company finances, productivity, expectations for the future and the companys competitiveness

� Normally peace clause

� The unions prepare their representatives

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Health trust

sector

Governmental

sector

KS – Municipal

sector

Oslo

Municipality

Public sector - collective agreements

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Public sector before..

� Centralised systems

� Bargaining had the function of reallocation instead ofusing wages as an instrument to achieve public sectorgoals

� Too much political involvement

� This is today’s situation in the Municipality of Oslo, butin other aereas we have been able to change things

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Public sector – our main goal

� Akademikerne was founded on thebasis of achieving collective localagreements to benefit

� our members wage

� the employers ability to recruit and keep skilled workers

� And also because the government is not a unified business, it is a lot ofindividual needs, which is best taken care of locally betweenemployers and the workers union representatives

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The Municipality of Oslo –major remaining challenge

Akademikerne

YS Unio

LO

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What can be learned from Norway?

�National coordination does not meancentralization or profile dictate

�Trendsetting industries should give a guideline, not an exact result

�Local level is important, coordination can takeplace on local level

�Akademikerne in Norway has succededbuilding a wage setting system for public sectorindependent of other, larger employeeconfederations