During a normal day you may be met by people who greet you pleasantly when you shop. They often earn well below average.

Those with the lowest incomes have also had the lowest wage growth in recent years

An increasing number of employees in Norway work in low-wage occupations and the differences in pay are growing.

An increasing number of people in Norway have a low income.

“Wage growth for the lowest paid has been worse than for those who earn well,” researcher Bård Jordfald at the Fafo Research Foundation tells sciencenorway.no.

In 2008, just over 21 per cent of jobs in Norway were low-wage jobs. Teenagers were not included in the dataset.

In 2018, this had increased to 27 per cent.

Shops, restaurants, and the construction industry

Very often, low-wage jobs are what the researchers call "Hello!" jobs – i.e., jobs where the employee has to pleasantly greet people many times a day.

This is common for those working in stores, hotels, restaurants, and other catering establishments.

Cleaning is another industry with low incomes, as well as employment agencies. A surprising number of people with low incomes also work in the construction industry.

“It's during ‘good times’ that the difference between those who earn poorly and those who earn well increases the most,” Jordfald says.

Much of the period that the researchers have analysed can be considered a ‘good time’ for the Norwegian economy.

Factors such as high labour migration and increased competition for jobs without formal education requirements have also contributed to keeping the wages of those least paid down.

What people earn

  • In 2019, an average (median) worker in Norway had a monthly wage of approximately NOK 43,000, just over 43,000 euros.
  • Those amongst the 10 per cent worst paid had an average wage of just over NOK 29,000 a month. Typical low-wage occupations include shop assistants, those who work in cafés and restaurants, as well as culture and agriculture industries.
  • Those amongst the 10 per cent best paid had an average monthly wage of close to NOK 70,000.

Source: Statistics Norway report 2021/1

The majority are employed in the private sector

When the media and politicians focus on those with low wages, they often refer to public employees in care professions or other parts of the health system.

But this new report shows that there are fare more low-paid jobs in private occupations.

“Three out of ten employees in private business currently receive low wages,” says Jordfald.

The fewest low-wage workers in the State

There are several ways to define low wages. Roughly speaking, in Norway it concerns all employees who earn less than NOK 221 an hour. This corresponds to an annual salary in a full-time position of less than NOK 430,000, just over 43 000 euros.

But many low-paid full-time workers earn far less than this.

The proportion of employees with low pay

Defined as people earning less than 85 per cent of the average industrial worker's wage. Approximate numbers.

Private sector: 30 per cent

The municipalities: 22 per cent

Health institutions: 10 per cent

The state: 7 per cent

Source: Fafo report 2021/29

Collective agreements have clearly become more important

Another discovery Bård Jordfald and his colleagues have made concerns how crucially important it has become for employees to be covered by a collective agreement.

“The proportion of low-wage jobs is decreasing in companies with a collective agreement,” Jordfald says. “On the other hand, it goes up in companies without a collective agreement.”

Nevertheless, the proportion of low-income workers in a business with a a collective agreement in place has fallen from 46 per cent in 2008 to just 28 per cent in 2018.

Bård Jordfald is a researcher at Fafo.

Fewer and fewer low-wage workers in Norway are thus covered by a collective agreement.

The rules for a collective agreement

“It is particularly in the "Hello!" professions in the service industry where we see that fewer now have a collective agreement,” says Jordfald.

The regulations are such that if a company chooses to become a member of an employers' organisation, the company must enter into a collective agreement with the employees if at least 10 per cent of them require this.

About 80 per cent of employees in companies that are members of the employers' organisation the Confederation of Norwegian Enterprise (NHO) have a collective agreement. At other employers' organisations such as the Federation of Norwegian Enterprise (Virke), the proportion is lower.

“Especially for young people and not least for those born abroad, it has become more important to work for a company with a collective agreement,” says the Fafo researcher.

The majority are adults and women

The researcher also emphasises that the majority of those with a low income are adults. A total of 58 per cent are over 30 years old.

Up to the age of 40, there are about the same number of women and men amongst the lowest paid. But from the age of 40, the proportion of women increases, the research shows.

No less than 44 per cent of all foreign-born workers in Norway receive a low wage.

In the years 2008 to 2018, the number of foreign-born workers in Norway increased by 78 per cent. In the same period, there were only 3 per cent more Norwegian-born workers.


Translated by Alette Bjordal Gjellesvik.

Read the Norwegian version of this article on forskning.no


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