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A new labour policy for the North

| Text and photo: Björn Lindahl, Top Photo: BarentsObserver.com

Norway should completely open up its three northernmost counties to labour immigration from Russia. The government also wants to end restrictions on labour from Bulgaria and Romania earlier than planned.

Bjarne Håkon Hanssen.These are some of the changes proposed in a white paper on labour immigration. To present them, the Minister of Labour and Social Inclusion travelled 2,500 kilometres from the capital to Kirkenes, the Norwegian border town to Russia, on the Barents Sea.

Nordic Labour Journal followed him during his day in the north. We spot the minister already at the airport. Bjarne Håkon Hanssen is easily recognisable even from behind. The weight of being responsible for the Norwegian labour market rests on his broad shoulders. A brown pinstripe suit disappears into a car sent by the local mayor. It drives straight to the Barents Institute, which seeks to improve the cooperation between Norway, Sweden, Finland and Russia.

He gives his first of many interviews during the day to the Barents Observer, the Institute's own news service. Just minutes later, Hansen's picture is on the Internet with a story that begins:

“Russians are welcome in Norway”. 

This was not always the case. For many decades Norway and Turkey were the only two NATO countries with borders to the Soviet Union. During the cold war only a trickle of people passed through the border control. After the dissolution of the Soviet Union there were fears of a mass flight from the Kola Peninsula, with its 2.5 million inhabitants, to Norway. Murmansk alone has 350,000 inhabitants. Kirkenes has 3,500.

The Barents Region was formed on an initiative from Norway. The aim was to involve the other Nordic countries in the North, as well as in the EU. More than 3,000 cross-border projects have been initiated. The flow of people across the border to Russia has grown to more than 100,000 people a year.

A new trend in immigration 

The economic cooperation has been full of disappointments, however. Russian bureaucracy, the fall of the Rouble at the end of the 90s and cultural differences yielded little success.

Kimek

 

One of the few success stories has been the Kimek yard in Kirkenes, where Russian fishing trawlers are being overhauled. The large ship repair hall can be seen from anywhere in Kirkenes, and is where Bjarne Håkon Hanssen chooses to present the white paper. Two huge ships serve as a backdrop. He grabs the microphone, and opens the session:

“It is important to realise that there was a marked change in 2006. For the first time there were more people immigrating to Norway to work, than the number who came here to be reunited with family members”.

In January this year 77,000 people had been given work permits. 90 per cent where from the EU. Eight out of ten were men.

"But this will not continue. The men will want to bring their families with them. We have to be prepared for that. In the 70s we got a lot of immigrants from Pakistan. They later brought their wives, who never learnt to speak Norwegian. The children spent their first years without learning it either. We don't want to make that mistake again.”

For demographic reasons, Norway,as many other European countries, will have a shrinking workforce while more people will be needed to take care of the old. “Today there are 110,000 people working in the health sector. But we will need 130,000 more.” 

No more cheap labour 

The most important labour market outside Norway will be the EU.

“Our workforce is 2.5 million. The EU work force is a hundred times larger. Through the EEA agreement
Norway is already open for labour from all the EU countries, except Romania and Bulgaria. For those two countries some restrictions are in place until 1 May 2009. We hope to lift those restrictions already from January 1st that year.”

Norway has attracted far more labour immigrants than any other Nordic country. One reason is that the economy has boomed for many consecutive years. Another reason is higher wages. Most of the labour immigrants come from Poland, which will have its own demographic problem. The Polish workforce will shrink with 12 per cent by 2050. At the same time higher living standards at home will make many Poles return from abroad.

“We must not even think that we should import cheap labour from abroad. We need to change our labour policy to get enough labour for those periods when we need it”, says Bjarne Håkon Hanssen. To do that, he is willing to hand over more responsibility to companies. Even if there will be some restrictions on unskilled labour from third countries, he is willing to offer carte blanche to everyone who is able to command a certain salary.

“We haven't set a limit yet, but if a company is willing to pay a foreign employee a yearly salary of 500,000 - 600,000 Norwegian crowns (62,000- 75,000 Euro), a work permit will be given automatically. The company can go ahead and hire. If it is willing to pay that much we figure that it will benefit Norway”, says Bjarne Håkon Hanssen.

This is certainly a different approach in a town where the workers have been more radically minded than in most places in Norway. 

Kirkenes was built on iron

Kirkenes was built at the turn of the last century when iron ore was found in Bjørnevatn, a few kilometres from the coast. 

 Bjørnevatn gruve

 

200 million tonnes of ore were taken out from 1906 to 1996, when the state-controlled mine finally closed. The miners' union was called “The cliff of the North” and used to march under the slogan “Down with the Throne, the Altar and Capitalist Rule.”

For many years the Norwegian state subsidised the Sydvaranger mine to the tune of 4.6 billion Norwegian crowns (half a billion Euro) between 1981 and 1996. The aim was to maintain a population on the border with Russia. The political thaw between East and West also ended the patience i the Norwegian Parliament for subsidising the mine. 

Ironically, a reopening of the mine is planned for next summer, thanks in large part to “Capitalist Rule”. Investors in Australia have bought shares for almost 100 million Euro in a company called Northern Iron, which will use the money to restart the mine. But this time half the workforce might be Russian.

How to attract labour immigrants

Norway is only one of many European countries seeking to attract labour immigrants. What are the country's strengths and weaknesses?

In the white paper on labour immigration there is a telling table, showing the average hourly wage for an industrial worker in Norwegian crowns (1 crown = 0.125 Euro). Norway tops the wage list, followed closely by Denmark, but with a large jump down to Sweden.

Norway 169

Denmark 164

Germany 125

Finland 117

United Kingdom 113

Sweden 111

Compare this to the average Polish hourly wage of just 17 Norwegian crowns.

At the same time the demand for workers has been very high in the construction sector. Compared to other European countries, Norway offers smaller differences in wages between low skilled work and more academic professions.

This makes it more difficult for Norway to attract highly skilled professionals, especially as the cost of living remains high. The presentation of the white paper in Kirkenes also highlights other positive and negative factors. Norway has a low crime rate and offers a good health service and long vacations. The high degree of gender equality, compared to many other countries, is another bonus. On the negative side Norway is often considered to be a peripheral country:

“Even if Norway has a favourable climate considering its geographic location, some foreigners see Norway as a geographical outpost with an inhospitable climate.”

 

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