Real Wage Growth Unlikely in 2023, Say Industry Leader

– I see that the leaders on the employers’ side expressed caution about the spring settlement to VG on Wednesday. We are also doing that, because we await the figures from the Technical Calculation Committee, says Stein Lier-Hansen, who for many years has led the negotiations on behalf of NHO’s largest association, Norsk Industri.

But he says that real wage growth is probably not realistic in the crisis year of 2023, with such high price increases. “The way we assess the situation now, there is little indication that it is possible to achieve real wage growth, but we have to wait until we see what TBU says and what estimates they give of price growth in Norway going forward, before we say anything very certain about that question.”

TBU is a committee that presents statistics and figures for wage and price developments. TBU presents its preliminary figures around 20 February and final figures in March before the start of settlements.

Lier-Hansen says the 1.9 per cent real wage decline is only an estimate.

– There is great uncertainty about what wage growth will actually be in 2022, he says.

– Yes, but there is no doubt that the employees experienced a real wage decrease last year?

– No, that is correct, but we want to see the final figures before we say anything more about the 23 settlement. Unrest and uncertainty characterize the framework and we will spend a long time establishing our position before the salary settlement.

Looking abroad

He says that for Norwegian industry it is crucial that the competitiveness of the industry exposed to competition is not weakened.

– Most of the countries our companies compete with, largely in the EU, have higher price growth than Norway. That gives grounds for you to be able to give a little more than a number of other countries?

– We are concerned with what the wage growth will be in, for example, German, Swedish and Finnish companies with which we compete, says Lier-Hansen.

Flat or reduction

DNB CEO Kjerstin Braathen has well over 6,000 employees in Norway’s largest bank.

She says it may be difficult to avoid a decline in real wages in 2023.

– Our analyzes show that price growth may be somewhat lower than in the six figures. It may be that we will go down to 4.5–5 per cent, but we will know more about that when we arrive at the settlement in the spring.

Statkraft CEO Christian Rynning-Tønnesen has his hands full with the electricity crisis during the day, but he also leads a large group with 4,800 employees in over 20 countries.

When we ask him if it is realistic to have a salary increase of around six per cent, he replies that it will be demanding, but that he believes that price growth will be able to decrease somewhat until the settlement in the spring.

– There is no doubt that it will be a demanding settlement in any case, but I believe that the price rise will be able to flatten out somewhat and go down. We see a trend that is positive: Energy prices seem to be on the way down and this will have knock-on effects for other prices, for example fertilizer and metal.

Most realistic

Orkla has over 20,000 employees. Orkla’s major owner, Stein Erik Hagen, says he also believes that the crisis year 2023, with high price increases, will result in a fall in real wages.

– Yes, it is probably the most realistic thing in a time of crisis, where it is important not to contribute to an inflationary spiral. But if the result is a decline in real wages in 2023, it is important that the employees at the next crossroads, when the economic framework is better, get to take part in the growth, through real wage growth, says Hagen.

This article is originally published on vg.no