The economics of the state settlement explained
The central wage settlement in the state has been concluded. Do you find it difficult to understand the different numbers and terms used in the wage settlement? We will try to explain.
We say that this is in line with what they agreed on in the frontline trade, where they have estimated the financial framework at 4.4 percent for 2025.
But how can 3.3 and 4.4 be the same?
The economics of the settlement
First, we present all the elements. Below is an explanation of each of them and how they are connected.
- Total cost framework: 4.4 per cent
- Carry-over from 2024: 1.4 per cent
- Projected slippage in 2025: 0.8 per cent
- Available limit as of 1 January: 2.2 per cent
- Disposable limit as of 1 May: 3.3 per cent
1. Total cost framework: 4.4 per cent
This is an estimate of how much the average salaries of all employees in the state will increase throughout 2025. This year, this is estimated at 4.4 per cent, and this is what we call the total financial framework for the settlement.
The frontline sector is also an estimated total framework for this year's settlement in the internationally exposed sector. In other words, it is the total financial framework we use if we want to compare ourselves with the frontline profession.
This total cost framework includes both wage increases given in this year's ordinary negotiations and wage increases given outside.
2. The overhang - money we have already agreed: 1.4 percent
We received the salary increase last year as of 2 June. Thus, the salary was higher at the end of the year than the average for the whole of 2024. We call this overhang.
This overhang has an effect into 2025 since the increases we agreed in 2024 give us higher wages as we enter the new year. Since we cannot spend the same money twice, the overhang is deducted from the total financial framework when we calculate how much should be distributed locally.
The parties have agreed on an estimated overhang of 1.4 per cent in 2025.
3. Slippage - wage increase outside ordinary negotiations: 0.8 per cent
Salaries also increase outside the ordinary negotiations. It can be a salary increase due to special negotiations, people leaving and new people being hired on higher salaries or something else.
Since the total financial framework in point 1 includes all salary increases during the year, the slippage must also be deducted from the financial framework for 2025 before we can start distributing the money.
Slippage is estimated at 0.8 per cent in 2025.
4. Available limit as of 1 January: 2.2 per cent
When we subtract overhang and slippage from the total economic framework, we are left with 2.2 per cent. This is the available limit if the supplements had been given from 1 January.
4.4 per cent - 1.4 per cent - 0.8 per cent = 2.2 per cent
5. Disposable limit as of 1 May: 3.3 per cent
But the pay increases will not be given as of 1 January. They are given as of 1 May. This year, the supplements are only given for eight months, not twelve. So then we have to calculate the frame from twelve to eight months:
2.2 percent * 12 months / 8 months = 3.3 percent
Then we are finally left with the pot for this year's local negotiations, which this year is 3.3 percent.
The money is distributed in local negotiations
In local negotiations, NITO and Akademikerne's union representatives meet with the management to distribute the available framework in item 5. They do this based on local wage policy and criteria in the Basic Collective Agreement.
In other words, it is only after the local negotiations that you will know how much exactly you will receive in salary increases this year. Contact your union representative to find out when local negotiations have been agreed where you work.
Local negotiations must be completed by 31 October. The supplements given in local negotiations will take effect from 1 May 2025.