Interest rate policy affects ordinary people
– Norges Bank puts too much emphasis on price increases and does not take the Norwegian economy into account enough. It's obvious how hard interest rate increases hit people's personal finances. A crisis of confidence in the economy is developing, says LO's chief economist, Roger Bjørnstad.
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Imported inflation
Roger Bjørnstad says it's absolutely right that Norges Bank should take inflation into account. But most of it is imported from abroad. The Norwegian Confederation of Trade Unions (LO) believes that the central bank was right to raise interest rates when domestic conditions led to price increases, but this has not happened to the same extent over the past year.
LO considers Norges Bank's interest rate policy to be wrong
– That's why LO criticizes so loudly when, among other things, the central bank justifies the rate increases with a "tight labor market". In practice, this means that they believe that unemployment is so low that they fear that it may lead to an increase in wages, adds Roger Bjørnstad.
Rising unemployment
Bjørnstad believes this has a major impact on employment and has a strong impact on the business community. In 2023, the number of unemployed people increased by 11. Data from the Norwegian Labor and Welfare Authority (NAV) show that the slowdown in the construction industry will contribute to an increase in unemployment in the future.
– What does 11 more unemployed mean? This means fathers of families in the construction industry who suddenly find themselves immersed in uncertainty and a further decline in income. This means Ukrainian refugees who have no opportunity to contribute to society. This means that many young people who have not yet entered the labor market will have to stay at home. 000 people is the population of the city of Brummundal, which is not a small number of people, says Bjørnstad.
Housing investment has fallen
The LO economist believes that there is a high risk of an increase in unemployment over the next year. Residential investment has declined over the past year, posing a significant challenge to the construction industry. It is likely that we will see a large increase in unemployment in the industry if new construction projects are not initiated. While the unemployment rate in 2023 was 3,6%, Bjørnstad believes it will rise to 3,9%. this year and 4,2 percent next time.
– Work for all has always been the goal of the labor movement. We will not only protect those already inside, but we will build a society where everyone is included. This means we should also have room to account for the more than 220 people who are registered in NAV with limited working capacity, says Bjørnstad.
Central salary negotiations. How much raise will you get this year?
Every year, the Norwegian Confederation of Trade Unions (LO) and the Confederation of Norwegian Enterprises (NHO) meet for central wage negotiations. This is what we call the tariff settlement and this is where it is decided how much of a pay rise you will receive this year.
This year we are dealing with the so-called main settlements, within which both wage regulations and regulations of all other provisions of collective agreements are negotiated.
The Supervisory Board of the Norwegian Confederation of Trade Unions adopts common guidelines for dispute resolution.
The meeting will take place at the Oslo Congress Center and will be broadcast live on the website of the Norwegian Confederation of Trade Unions.
As LO expects, wage growth this year must exceed the forecast price increase of 4,1%. Because Norges Bank's interest rate path takes into account a 5% wage increase. this year, it must exceed 5% for wage growth to put further pressure on interest rates.
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Source and Photo: Norwegian Confederation of Trade Unions (LO)
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