Well wage settlement room

This year’s wage settlement will likely be a good one for most people. We’re on our way out of the pandemic. The Norwegian economy is doing well and there is a shortage of labour.

The requirement set at LO’s supervisory board meeting earlier this week was that members must increase purchasing power.

At the same time, the uncertainty is greater than it has been in a long time. It is mainly about the tragic situation in Ukraine, but also about how the epidemic has developed in the rest of the world, and whether it is possible to correct the bottlenecks that have arisen in the production of goods and services at the international level. All this has a direct impact on the Norwegian economy.

The Technical Accounts Committee, the panel of experts that is the de facto basis for wage adjustments, will submit a new report in March. A preliminary report submitted in mid-February showed that annual wage growth in the industry from 2020 to -21 was three percent.

There is reason to believe that the demands on the part of the employee will be much higher than this level when wage negotiations begin. The sharp rise in electricity prices and the notable rise in food prices will increase the demands of the negotiations.

The demand for a good settlement is not unreasonable. The owners of capital in recent years have earned solid profits. Participation values ​​have increased, and so it is not unreasonable for employees to want a share of this value.

At the same time, the danger signals are becoming increasingly clear. We see rising inflation in the USA, Europe and Norway. This in turn causes interest rates to rise internationally and here at home. At the same time, we see an appreciation of the krone exchange rate.

The combination of a strong krone, higher interest rates and an exorbitant wage settlement can meet the challenges of a competitive industry.

For a good wage settlement, it also comes with an invoice. In this case, it may end up at the table of Finance Minister Trygiv Slagsvold-Widom. The counterpart to the high wage settlement, high interest rates and rising inflation is tight monetary policy.

In practice, this means cuts in public spending and less money for areas such as transportation, municipalities and counties.

We live in an extraordinary time of uncertainty. Two years into the pandemic, the Russian invasion of Ukraine has increased insecurity and insecurity.

But we are sitting so far on the green branch. As a major exporter of oil and gas to Europe, it is clear that we will get a sharp increase in revenue as a result of the energy crisis we are now witnessing in Europe.

Our challenge will be to accept that the sugar-rich country should cut back on spending because we are all getting richer after completing this year’s wage adjustment.