Myths and facts about salaries in the state
Have two collective agreements in the state led to increased wage differences and chaos? This is a claim that is repeated in the debate. Here we take a closer look at what the numbers actually show.
The debate about the wage system in the state is characterized by strong claims and established truths. NITO and Akademikerne defend the current model where we have a collective agreement where the entire financial pot is distributed locally. The state and the Norwegian Confederation of Trade Unions (LO) want a joint agreement for all, with a strong emphasis on central supplements. They say that two different collective agreements in the state create differences.
But what is actually true when we look at the numbers? Here we take a stand against five myths about wage formation in the state.
Background: The Basic Collective Agreement in the State
The Basic Collective Agreement regulates pay and key working conditions for government employees. The state enters into agreements with the four main confederations: LO, YS, Unio and Akademikerne. NITO is negotiating together with Akademikerne.
Until 2016, all the agreements were identical. Akademikerne then got its own agreement, where the entire available pot is distributed in negotiations out in the individual enterprise. In 2022, Unio switched to the same model.
In 2024, both Akademikerne and Unio went on strike to keep their collective agreement, after the state demanded that they return to a joint agreement with greater emphasis on central supplements. The strike ended with a forced wage tribunal. The National Salary Tribunal ruled in favour of Akademikerne and Unio: The agreement was continued.
Myth 1: Two collective agreements create greater wage differences in the state
Some believe that two different collective agreements are the main reason why the wage differences are increasing. That a system with two parallel agreements creates differences in pay only based on which union you are a member of.
Facts
This is a claim that has not been documented. A comprehensive report from the research foundation Fafo states that there have not been major differences in either wage development or wage dispersion since we got two collective agreements in the state in 2016, compared to before.
The real wage differences in the state are not between the two collective agreements, but between different ministries and enterprises. Different agencies have different needs, which is reflected in salaries. It has nothing to do with two different collective agreements.
Myth 2: Local negotiations result in arbitrary wages and snout allowances
Some people think that when all wage development takes place locally, you lose control. The myth says that wage development is then controlled by chance and snout factor, rather than competence, responsibility and effort.
Facts
Local wage formation is not the same as random snout supplements. The salary funds are distributed through local, collective negotiations between the employer and employee representatives in the individual enterprise. They can agree on both general supplements, supplements for groups and set aside funds for individual distribution. All based on known, agreed criteria.
The parties can choose to give most of it in general if they think it is right for their workplace. In other places, they may choose to distribute the pot completely differently.
In any case, it is difficult to see that a handful of negotiators in Oslo should have better conditions for distributing salaries for over 180,000 government employees than local parties who know their own business.
Myth 3: A joint agreement with central supplements is the only thing that can solve equal pay between the sexes
We often hear that the only way to ensure fairness between women and men is centrally controlled wage formation with high krone increases. The myth is that two agreements and local negotiations actively counteract equal pay in the state.
Facts
The figures show the opposite. The Fafo report from 2024 shows that the wage gap between women and men was somewhat lower on Akademikerne's collective agreement than on LO/YS's. Central krone supplements are no guarantee of equal pay.
Statistics Norway's figures confirm that women in the state had a wage growth of 30.3 per cent from 2016 to 2023, compared with 28.5 per cent for men. The wage differences between the sexes thus narrowed during the period when we have had two different collective agreements in the state – and where Akademikerne has distributed the entire pot in local negotiations.
No significant differences in pay between women and men have been found when comparing employees in the same position and with the same education. Where such biases nevertheless arise, they are best discovered and corrected locally, by parties who know the company and the individual employee. A central settlement has neither an overview of nor the means to correct such imbalances in the individual agency.
Myth 4: A joint agreement is the only thing that guarantees equal pay for equal work
The myth says that two different collective agreements mean that people who do exactly the same job receive different pay, solely based on which union they are a member of.
Facts
This premise overlooks the fact that "equal work" is rarely exactly the same in practice. Local wage formation is precisely about being able to reward different skills, different responsibilities and different efforts, even if two people formally have the same position.
The Fafo report finds that it is not agreement affiliation that shapes wage developments for the individual, but the company's own priorities and local negotiations.
Nor is it anything new that employees in the same job category are paid differently. Even under the old system with identical agreements and salary steps, different salaries were given within the same position. Wage differences within an enterprise are not the result of two collective agreements. This is an expression of the fact that employers have always had a need to differentiate pay based on competence and experience.
Myth 5: High wage growth in some agencies proves that the system has failed
When media reports show that some central government agencies have had high wage growth, this is often used as proof that two different collective agreements have led to the enterprises losing control.
Facts
Such activity figures give a misleading picture of real wage growth. Nor do they say anything about which collective agreement the employees belong to.
High figures in some agencies are often due to so-called compositional effects. This means that it is changes in who works in the company that drive the average up, not real wage increases for the employees. If low-paid positions disappear and are replaced by more competence-intensive roles, the average salary will rise without any specific people having received a salary increase. The same happens when temporary supplements and bonuses are paid that are not part of the fixed salary.
Wage growth in the Armed Forces is pushing the average up sharply. This is largely due to irregular additions related to increased exercise activity. This is not an expression of a permanent wage increase, but of increased activity.
Greater wage growth in some agencies and enterprises has nothing to do with the fact that we have two different collective agreements.
