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Employees are getting less and less from organizational value creation

Published: Mar. 13 2023

The latest data from governmental committee TBU (Det tekniske beregningsutvalget) shows higher salary growth in Norway; yet at the same time, consumer buying power is decreasing.

The TBU report confirms what we already know: A high level of activity in the Norwegian economy, a high level of profit in many companies and a huge lack of qualified labor have resulted in higher wage growth, says Tekna Privat’s lead negotiator Anders Kvam.

Read the press release here (In Norwegian only) 

Recent salary statistics from Statistics Norway (SSB) show that in 2022 there was on average a 4.6% wage growth, with a higher growth rate in the private sector than in public administration.

– The TBU numbers and Statistics Norway statistics can’t be compared equally, since TBU uses a different concept of wages and method of dividing the economy into sectors. However, the story they tell is the same; for example, TBU is currently predicting an average annual industrial wage growth of 4.0%, says Kvam.

Real wages decrease

In spite of higher wage growth, overall price increases have been even higher, and all wage earners have clearly seen their real wages decrease. Yet according to TBU’s numbers for industry, profit levels in certain businesses have been so high that their labor cost share has fallen. This in turn means that owners are getting a larger share of their organization’s value creation.

– It’s important that the labor market functions well; wage growth depends on the financial situation of each individual company. Tekna believes that local collective wage formation addresses this situation in the labor market so that employee competency will always find its way to where it creates the most value, says Kvam.

He points out that Tekna’s agreements in the private sector ensure that wage formation takes place locally in accordance with four criteria: the company’s financial situation, productivity, competitive edge and future prospects.

Public and private competing in the labor market

Public organizations compete with private companies to get the same employee competency. Tekna believes that public sector employers must acknowledge this fact.

– It’s important that public sector employers acknowledge that they’re competing in the same labor market with the private sector. It’s necessary for public organizations to be able to keep and recruit the employee competency needed for completing their work tasks in the best way possible. It’s especially important now because we’re in a time where there’s a shortage of labor, and the competition for workers has gotten tougher, says Tekna Stat’s lead negotiator Linn Guste-Pedersen.

Lead negotiator Sonia Monfort Roedelé thinks that the current salary differences among Tekna members employed in the private and public sectors have gotten out of hand.

Tekna’s salary statistics show that there are wage gaps of up to NOK 400,000 in average employees’ salaries at the end of their career. It’s very challenging to try and change this situation. And Tekna’s concerned that wage gaps are increasing even more now between the public and private sectors. The wage gap’s a problem for keeping and recruiting competent employees in municipal and state agencies; Tekna’s afraid that this’ll eventually affect public sector services in a negative way, she concludes.

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