3.1 General context
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Labour market situation in Norway
The Norwegian labour market model is characterized by tripartite cooperation at the national level between a strong trade union movement, centralised employers’ associations, and the state. The Norwegian Working Environment Act [Arbeidsmiljøloven] protects workers’ rights while emphasising workers’ obligations to participate in creating a sound working environment. A cooperative system of industrial relations became institutionalised in 1935 with the signing of the first ‘Basic Agreement’ by the employers’ organisation Norsk Arbeidsgiverforening (N.A.F.) (today The Confederation of Norwegian Enterprise, NHO) and Arbeidernes Faglige Landsorganisasjon (today The Confederation of Norwegian Trade Unions, LO). This agreement has subsequently been part of all collective agreements between the parties. Wage setting is the domain of the bargaining parties, and no national statutory minimum wage exists. Trade unions and employers’ organizations play a decisive role in the evolution of the labour market. There is broad political consensus in Norway for this model.
Norway has a high level of employment, significantly due to the high employment rate among women. According to Statistics Norway the number of employed people in Norway has increased each year since the 1990s. Notable exceptions are the period after the financial crises in 2008 and the drop in the oil prices in 2014. During the period 2007-2017 the level of the employment rate (employed persons divided by the entire population in the same age group) has either decreased or been stable. The employment rate began to increase again after 2017. According to the 2018 OECD report Investing in Youth: Norway recent trends and challenges for the youth population (15-29) are:
- the youth employment rate has declined by 7 ppts since its peak in 2008, reflecting rapid youth population growth because of high immigration
- the absolute number of young people in work has increased, but so has the number of young people not in employment, education or training (NEET)
- the NEET rate in Norway is one of the lowest across OECD countries (9% vs. OECD average of 14%)
- 2/3 of NEETs are inactive and this share is growing; these young people are generally further from the labour market, and often not in touch with public services
- young people without an upper-secondary degree account for 56% of all NEETs in Norway, a much greater share than in the OECD on average (36%)
- those without an upper-secondary degree face a risk of being NEET that is seven times higher than for university graduates (numbers for 25-29 year olds)
- 6% of all young people receive incapacity benefits – this is three times the OECD average and more than in any other OECD country
Since the beginning of the corona crisis in Norway, employees in several sectors have been affected. This was especially the case for employees in the tourism, transportation, and services sectors. The Revised National Budget for 2020 indicates that due to the high number of lay-offs, registered unemployment has climbed to levels not seen in 75 years. Unemployment is forecast to rise from 2.2 percent in 2019 to 5.9 percent this year. The unemployment rate is estimated to increase from 2.2 percent in 2019 to 5.9 percent in 2020. By the end of 2021 the unemployment rate was 3.4 percent and it is expected to go back to normal during 2022.
Social dialogue and tripartism are specific concepts describing the Norwegian labour market model. The 2019 report Getting and staying together: 100 years of social dialogue and tripartism in Norway, financed by the ILO and the Norwegian Ministry of Labour and Social Affairs, examines the role of tripartism and social dialogue in Norway.
Information about unemployment in Norway is provided through two sources.
- The Norwegian Labour and Welfare Administration (NAV) compiles statistics on unemployed persons at the Employment Offices. Government measures to promote employment are compiled by NAV based on registers of unemployed persons and applicants for work.
- Statistics Norway runs an annual survey – the Labour Force Survey (LFS) to provide data on employment and unemployment, and data on the labour force participation in different sections of the population. The figures on unemployment based on the LFS differ from the figures on unemployed persons registered at the Employment Offices because the LFS-figures also include unemployed persons not registered at the Employment Offices, some of the participants in government measures to promote employment and some of the disabled persons. On the other hand, some of the registered unemployed are not classified as unemployed in the LFS, based on the information given on seeking and availability for work. Concepts and definitions used in the LFS are in accordance with recommendations given by the International Labour Organization (ILO) and EU/Eurostat. Concepts describing employment status and aspects of work are described LSF home page.