State funding halted strike
Norwegian labour organizations, and business as well, scored major victories when the country's left-centre government coughed up more money to fund pensions, and thereby ended the threat of a massive strike. Taxpayers will probably end up footing the bill.
 Prime Minister Jens Stoltenberg of the Labour Party played a key role in meeting the trade union federation's demands. PHOTO: SARA JOHANNESSEN/SCANPIX |
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More than 40,000 workers were poised to walk off the job on Wednesday, if their labour leaders failed to win assurances that would preserve and even improve pension benefits. They won that, five hours after the deadline for a settlement had passed.
Norway's trade union federation LO also won pay raises amounting to 5.6 percent for most of their members and more for low-paid workers. Observers said that nearly all of LO's demands were met, through a settlement that opposition politicians in parliament already are calling "expensive, terribly expensive."
The organization representing employers, NHO, was nevertheless pleased as well, with NHO chief negotiator Finn Bergesen calling it "reasonable" and even noting that some workers may have expected wage hikes to be a bit higher. News emerged late last week that executives of NHO's own member companies received average pay raises of well over 20 percent last year.
Complicated negotiations
The thorniest issue in this year's labour negotiations, however, was pensions. It made the round of negotiations more complicated than they had been in years, according to those involved.
The government, worried about the money needed to fund future pension obligations, has been trying for years to push through reforms that would encourage Norwegians to work longer, even beyond the country's official retirement age of 67.
Many organized workers, however, have long enjoyed an agreement among the state, their unions and employers called AFP (avtalefestet pensjon) that allows them to retire at age 62 and collect nearly the same amount of pension income they'd receive at 67. The state has funded most of the difference between full benefits of workers' pension plans and the trimmed-down benefits that come with early retirement.
Now the government, headed by Prime Minister Jens Stoltenberg of the Labour Party, has agreed to continue funding that difference, to a degree that will keep benefits intact and perhaps even improve them for workers born before 1953, because they'll now be able to retire but work on the side without losing benefits. Pension benefits will also be largely maintained for workers born before 1962.
'Good for Norway'
Stoltenberg had to back off on plans to cut benefits for those who retired at age 62. He nonetheless claimed the settlement was "good for Norway," claiming the government had contributed to "a solution that secures a fair pension system and which allows the opportunity to combine work and pension without losing pension benefits."
Erna Solberg of the Conservatives called the settlement "terribly expensive," claiming it will cost more than NOK 100 billion over the next 15 years. "It's an enormous amount that must be taken out of the national budget," she told Norwegian Broadcasting (NRK).
She stopped short of calling it a break from pension reform intentions, but noted that future generations will need to pay for the pension benefits.
"Money that could have been invested in schools and other portions of our society is being used to pay the government’s way out of these labour negotiations," she said. Others say the state can tap into its so-called "oil fund" to help meet obligations, which already is earmarked for pensions.
Nina Berglund
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